Why the velocity of fluid does increases when decreasing the area instead of increase in pressure and why does pressure in a nozzle decrease as the fluid velocity increases?
The answer is in energy conservation and it is like a swing increases its speed near the bottom point and loses speed to zero when at the highest point of its swing. In the first case, all the energy is kinetic and in the second, it is all potential. It is a mix in between the two extremes.
The energy in a flowing fluid can be the sum of kinetic/motion, pressure or stress and elevation or gravity. Thus Ek=.5mv^2, Ep(work=force*distace)=F.dx, Eh=mgh, using the usual notations.
In flowing fluids mass is not well defined so we divide the terms by the volume V, noting that m/V=ρ, F.dx=mgdx=mgV/A=p*V and get; et=.5ρv^2+p+ρgh= constant for no friction loss. This is the energy equation and Bernoulli equation if we divide by ρ to get; pt=.5v^2+p/ρ + gh= constant for no losses in pressure.
So if any one of these terms increases, either or both of the other terms must decrease since the total is constant. When the section area increases, the flow velocity decreases since the flow-rate Q in the two sections 1,2 is the same/constant or ; Q=A1 v1= A2 v2. The decrease in velocity is a decrease in the kinetic energy term and this causes the pressure term to increase to compensate for it. This reverse is correct of course.
In the nozzle, the area decreases causing the speed to increase and the pressure to decrease to compensate for it. This is used by engineers to create a vacuum to suck unwanted air accumulating in condensers and also to pump liquid in the jet-pump application. It is used to pump sand in sand-blasting processes. Such pumps are ideal when a contact with the working fluid is not desirable.
Imagine that you have a certain amount of particles that has to pass through an area. When you decrease this area, the same amount has to pass through it, and hence it has to increase the speed (this is a simple answer).
In the next part of the question, there is a term called total pressure, and it is conserved in the flow when there is no forces exerted. The total pressure combines two terms (dynamic pressure 0.5*rho*U*U, and static pressure P). Increasing the velocity would increase the dynamic pressure, and therefore the static pressure has to decrease to maintain the same value of total pressure.