...why is better to include the sense resistor in feedback path?
Most of modern circuits use some degree of digital logic (TTL, CMOS, microcontrollers, etc.). Quite few of them are rather picky about operating voltage. For example TTL expects 4.75-5.25V and most of the chips list some max limit like 6V etc. The point is that small change such as moving from 5V to 5.25V means you are out of spec. and moving from 5.25V to 6V could mean that your hardware suffered damage or is destroyed. Many things are using different voltages but it is usually 5V and less that is very sensitive to voltage changes or transients. you can also compare what is standard in the inductry, you don't want your fancy PSU to be an laughing stock of everyone who made a regulated power supply in their life. For example LM7805 states output tolerance of +/-2% which translates to +/-0.1V (or +/-4% over rated temperature range). This is a very old regulator, many others are better (LM317 is 0.3% etc.). If 7805 could not get the output to be within commonly required 4.75-5.25V, it would be worthless piece of cr@p and nobody would want it. The whole point of voltage regulation is to make a power supply where voltage is (and remains) constant - NO MATTER WHAT! This also means regardless if you draw 1mA, 500mA or 2.5A. Ok with this? Good...
Key points:
1. getting PERFECTLY stable output is impossible (but we try and get close)
2. even when we REGULATE voltage, we STILL have SOME deviation of the output voltage.
3. things that are called regulators but don't regulate very well are bad (if it is possible to regulate better, then replace "bad" with "junk").
4. to get regulation, we need reference and feedback
5. any resistance after regulator creates ADDITIONAL fluctuations in output voltage (because now the output is not output of the regulator but point after that resistance).
Voltage divider chains such as R4-VR1-R5 are key part of the feedback loop. They are used to measure voltage at some point. If voltage at THAT point is below reference, regulator increases output to compensate. If voltage at THAT point is above reference, regulator decreases output to compensate. This process is called closed loop and corrects voltage (which is what regulation should do) at THAT point. The only problem is that that is the WRONG point. We don't care that our circuit makes voltage stable at SOME point. We want that to be at the PSU output.