AM "hunts" far less, is lower fidelity and is subject to ionization. Broader bandwidth would make it impossible to get a clear signal at night, stations would drown each other out. FM requires direct line-of-sight and signals in those higher frequencies don't "bounce" back down off the ionosphere.
Because of the method of modulation. FM is modulated by changing the frequency back and forth in sync with what is being broadcast. It needs a higher bandwidth allocation to achieve good fidelity. AM doesn't need that. AM only needs enough BW to separate one station from the next. Actually, the ratio of the bandwidth to station frequencies is about 3 times higher for AM that FM.
