That goes way back to the Middle Ages. That first letter is called a "long s", less commonly referred to as an "extended s". It developed because it was easier to slide a quill pen from one letter to the next if you made it like that. When the printing press was invented it was so ingrained that people kept on using it for centuries even though it was not needed in printed material.
The bill of rights only applies to Congrefs. It says what Congrefs may and may not do, but it says nothing about what states may or may not do. The fourteenth amendment extended many of these restrictions to the states, and thus to any local governments that are creations of the states.