There is the story, in Quran, of a man who kills his brother
Thereupon Allah sent forth a raven who began to scratch the earth to
show him how he might cover the corpse of his brother. So seeing he
cried: 'Woe unto me! Was I unable even to be like this raven and find
a way to cover the corpse of my brother? Then he became full of
remorse at his doing. (5:31)
This verse is self-explanatory as regards the preferred mode of disposing off the dead. Anthropologists would say that burial is a cultural artifact, but for a Muslim reading the Quran, that custom began with the guidance of God.
To answer your question about reusing graves, I think the following Hadith sufficiently covers it:
The Prophet (ﷺ) buried every two martyrs of Uhud in one grave. bukhari/23/101
Erecting tombs is not mandated by Islam, in fact it is abhorred. Possibly the best example of a truly Islamic graveyard is Jannat-Al-Baqih. However, in practice, the choice of decorating graves is somewhat directly proportional to the Sufic bent of the culture. The more the Sufi element in Muslim culture the more the tendency to decorate graves. This is perhaps due to the Sufi veneration of saints and Awlia-Allah posthumously by building shrines around their graves.