This is a solid trick, it'll win combat most of the time and has the "oops I win" upside of sending your big creature into the air
Then, if anything were to happen to it, you can return Quilled Greatwurm to the battlefield by removing just six counters from creatures you control and paying its mana cost again
A "blocking creature" is one that has been declared as a blocker this combat, or one that was put onto the battlefield blocking this combat
Sea Gate Loremaster is listed as rare in Zendikar
Mummies are explicitly said to massively outnumber the living in the Aetherdrift Guide, so either Amonkhet was like 75% mummy for the Hour of Reckoning (not especially borne out by the story or cards), or they had a very low casualty rate across two invasions
It's not exactly going to stop the likes of powerhouse archetypes like Dredge or Reanimator, as those cards enter the graveyard from the deck or hand as opposed to the battlefield