1) War was seen as inevitable at that point by many countries, not just Germany. There was a peacetime draft. Britain and Germany, for example, saw each other as natural enemies. Russia and Austrian relations deteriorated. Austria was tensely watching Serbia grow in power and was waiting for their chance to strike.
2) Germany hardly had other choices to not enter the conflict. After the breakdown of the Bismarckian system, Austria-Hungary was the only ally. Russia, France, and England became allies to oppose Germany's growing power. In the event of the assassination, Austria was determined to declare war on Serbia. With the mobilization of Russia to help Serbia, the possible consequence of Austria being defeated would cause Germany's power to decline. This idea certainly contributed to Germany's decision to offer its support to Austria and declare war accordingly.
3) Although Germany knew in that in supporting Austria they were risking a European war, they expected to win. The Schlieffen plan was aimed at primarily defeating France in just a few months. They believed that Britain would not be entering the war (it was dealing with industrial unrest, a possible civil war) and did not expect other non-European countries to enter as well.
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The war guilt clause forced Germany to take all the blame for World War I.
Germany was forced to pay the Allied Powers and accept blame for the war (apex)
The Treaty of Versailles
That was one of the reasons for Germany's loss of WW 2.
No Hitler did not blame the Jews because he didn't just not like them? He blamed them because he needed an escape rout instead of Germany being blamed and the Jewish people didn't have a government to do anything about it so they were helpless.