Question 1
As other answers have said, the different articles found in Indo-European languages developed over time. No articles are reconstructed for Proto-Indo-European. I don't know of any European language, or in fact any language in any family, that used to have articles and then lost them.
The Indo-European language that developed a definite article the earliest is Greek. Since Greek lacks an ablative case, Marc's formulation of "(definite) articles show up when the number of cases drop below 5 (not counting vocative)" is I think true as an observation, but I'm not sure it means anything in terms of causation. I can't see why the difference between 5 and 4 cases would be significant here; there are languages such as Hungarian that have articles and more than 5 cases (although Hungarian cases are arguably not entirely comparable to Indo-European cases).
Definite articles developed later in Romance and Germanic languages. The Slavic language Macedonian has also developed a (suffixal) definite article, and like the Romance languages, it has lost case inflection.
Ancient Greek did not have an indefinite article; indefinite articles developed later. All singular indefinite articles that I am familiar are derived from the numeral one.
Question 2
While it’s true that word order in languages without articles is sometimes related to whether a noun phrase is definite or indefinite, I don’t think that is systematic or common enough in article-less languages to be seen as a general “compensatory” factor for the lack of definite and indefinite articles. The thing is, the distinction between the definite and indefinite article is often predictable just from the context: either the identity of the following word, of the head noun, or of the construction in which it is used, or the overall semantics of the sentence—and even when not, it is often not essential information. So even though a fair number of languages have developed highly grammaticalized means of expressing definiteness or indefiniteness, I think it’s probably not right to approach the matter with the assumption that languages need to have some way of marking (in)definiteness that is as pervasive as (in)definite articles in languages that have them.
If there is actually a negative correlation between case marking and articles (which I am not sure is true), I would guess that it is more likely because both function to mark the boundaries and categories of words or phrases. The presence of an article, whether definite or indefinite, or of a case ending, whether nominative, accusative, etc., can help a listener identify the edges of noun phrases or of nouns.