Some spells and abilities that create Food tokens may require targets. If each target chosen is an illegal target as that spell or ability tries to resolve, it won't resolve. You won't create any Food tokens.

Whatever you do, don't eat the delicious cards.

Food sacrificed due to The Cabbage Merchant's second triggered ability is not being sacrificed to the Food's own ability, so you will not gain any life.

If an effect refers to a Food, it means any Food artifact, not just a Food artifact token. For example, you can sacrifice Tough Cookie (an Artifact Creature — Food Golem) to activate Bosco, Just a Bear's ability (an ability with "Sacrifice a Food" in its cost). You can't sacrifice a Food to pay multiple costs. For example, you can't sacrifice a Food token to activate its own ability and also to activate Bosco, Just a Bear's ability.

Food is an artifact type. Even though it appears on some creatures, it's never a creature type.