There is are answers to both your questions, actually!

First, we should identify that there existed three main types of urban settlement in the Roman Empire/Western Europe during antiquity. The first was the major capitals, like Rome, and later Ravenna, Trier, etc. These were cities whose economies were supported primarily by the amalgamated bureaucracy and wealth of the empire, and thus supporting these cities and their populations depended upon the maintenance of that bureaucracy and inflow of that wealth. Second, we have the medium sized centres that, particularly in the later empire as provinces were shorn off from one another, served as local administrative capitals. Many of these medium sized cities, such as Londinium, Lugdunum, Lutetia, or Carthago Nova, grew quite large and prosperous indeed, although they were always secondary cities compared to the major ones like Rome or Alexandria. At any rate, these medium sized cities were often founded/refounded as Roman colonies or centres of strong Roman allies, and often represented the most heavily 'Romanized' aspects of provincial life, with local elites spending heavily on their cities. Indeed, unlike the Romes or Constantinoples of the world, most of the major public works and monuments found in ancient urban centres were financed almost entirely by said local elites. Finally, we have the smaller but still important urban centres that sprung up around the legionary camps.

For urban centres of any size to exist, they need some kind of support; you cannot feed feed the population just via whatever food they can grow in their gardens after all. The size of that urban centre then depends upon the size of the support network. As outlined above, the support network for the first catagory is the whole empire, the second category might be a whole province or region, and for the third, the legion itself. As soon as the support network that sustains these settlements breaks down, they will be abandoned. And that's exactly what happened in the early medieval period. This, combined with a breakdown in security during late antiquity, meant that the settlements themselves became fat targets that could barely defend themselves (if they even had walls, which many did not). As the support networks broke down, the population would have had to migrate, and if the city was sacked large portions of the population could be killed or at least rendered homeless.

We can see both of these factors play out in the population of the city of Rome itself. As one of those major imperial cities mentioned above, it's population at the height of the Empire in the late 2nd century may have reached a million or even more. With the decline of the Empire however, by the beginning of the 5th century it was likely closer to 400,000-500,000. This is after a period of more than a century of divided imperial spending; cities like Ravenna and Trier in the west became capitals, while huge investments were made in the city of Nova Roma, former Byzantium and future Constantinople, to create a new capital there. For comparison, while Rome's population declined in the 4th century, Constaninople went from a few thousand to matching that of Rome's by the beginning of the 5th century. However, from there the two cities take a drastically different historical turn. In Rome, multiple sacks over the course of the next hundred and fifty years and a complete collapse of the supporting burearuacy, spending, and support network of the Empire saw the population drop to perhaps as low as 25,000 by the beginning of the 7th century. Now, this was still a sizeable urban centre by western European standards at this point, but the city itself was a shadow of it's former self, with pastures and farms springing up within the safe-ish confines of the walled ancient city, making it valuable land indeed, a fate that would be repeated in Constantinople in the 13th to 15th centuries.

With the fall of the Empire, the security (and more importantly, concentration of wealth) that allowed local elites to build and maintain the large urban communities of the second type outlined above faded away as well. Rather then spending money in that large community, land-owners focused on their own lands, an idea we will come back to. The final type, the legionary camp, obviously also faded away without the Imperial burearacy to support it.

So, what was the decline caused by? Well, susinctly, without imperial spending to support them, the major centres fell into slow decline, many ending entirely with larger catastrophic events such as sacks. Without the security of the Roman state to support them combined with the lack of spending by elites or a central empire meant that important public works maintenance, ranging from aqueducts to dredging of harbours, was no longer being done, leading to the further decline of cities that required such public works to exist. The local elites that represnted the most important factors in the growth of those secondary cities throughout the empire redeployed their wealth even more locally. This is where many medieval urban centres got their start, as the grand villas of the Roman elite throughout the west were transformed into small walled cities, while elsewhere in the Empire other similar places, including some odd ones, were transformed into places of refuge. For most of the early-medieval period, the chaos and warfare meant that very little resources were devoted to the building and growth of cities by either central governments (such as they were) or local elites. Instead, early medieval urbanization was characterized by this refuge model, with rural populations flocking to these protected enclaves during times of trouble, but otherwise mostly living rurally. Many of these small urban communities continue to exist largely in their medieval form throughout western Europe, particularly in France. It would take until some semblance of order and ordering of the central governments of the successor states in the West for both the security and funding to become adequate to support a rebirth of urban growth.