You do have to send the raised seal birth certificate because it is that seal that makes it official. You do get your birth certificate back with your new passport.
If you are traveling within six weeks, you can request expedited processing of your passport. However, I've found that regular service is fairly speedy. My fiance just got hers less than four weeks after applying, and I got mine in under three weeks, and that was during the Christmas holidays and the anthrax scare back in 2001.