It is a solvent because it can dissolve a large number of polar substances (polar aprotic solvent)
It can be used to manufacture aniline because it can be reduced by stephen's reduction to anniline
It is also used as a scent because it has pleasant odour

Nitrobenzene can itself be reduced to aniline, so it acts as an oxidising agent.

Nitro benzene on further nitration forms m - dinitro benzene as nitro group is meta directing group. Thus Assertion as well as Reason both are correct and Reason is correct explanation of Asseriton.

The reaction of diazonium salt with aniline is an example of

A.  Nucleophilic substitution reaction

When Nitrobenzene first reacts with $NH _4Cl/Zn$ it forms phenyl hydroxylamine.

3-Chloro-1-nitrobenzene
Nitro substituents have positive charge on the atom bonded to ring. So the like charges repel each other at ortho and para position as compared to meta substitution. So meta position is favored at 3 chloro in the ring.

The exact influence of a given substituent is seen as its interactions with the delocalized positive charge on the benzonium intermediate generated by bonding to the electrophile at each of the three substitution sites. Nitro groups have a positive charge on the atom bonded to the aromatic ring. Like charges of two groups are destabilized by charge repulsion so meta-products predominate as compared to others.