grammar when not cleaned ( i.e removing null production, unit production , non usefull symbol-(symbols that can not be reached by start symbol and sybol that do not generate any terminal symbol) is deceiving in a sense that if the grammar generates a language that accepts Empty string than it can be written as
S->S/E
here S is language except from epsilon. but when null production is in between grammar it generates cofusion and its not easy to deduce the language generated by that grammar.
coming to the point of type 1 and type 3. not all type 1 grammar are type 3(beacuse if it were then all the REL were regular , so its better to say some type 1 are type 3) but all type 3 are type 1( as all regualr are REL )