The scores are determined by algorithms. The inputs to the algorithms are generated by humans essentially annotating games, recording passes, shots, runs, etc. along with outcomes. (Which is, it must be said, a blooming awful job.) There's some potential for bias, but much less than fan ratings. I think I recall some of this described in Kuper's book Soccernomics.
You can't spell failure without FAI
It's a very strange league - I can kind of understand how that'd arise. The big games are the ones where you're testing yourself against Barca or Bayern. But those games end in absolute hammerings as often as not, so it's clearly not their level, but I can understand how you'd look up to find your level rather than think it's St Mirren or Ross County (which equally isn't their level)
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