Wallet – Bitcoin Core stores public keys and balances unencrypted. a few questions

I found this statement in the Sparrow Wallet documentation:

Unfortunately, Bitcoin Core stores public keys and balances unencrypted on the computer it is running on. If this computer is regularly connected to the Internet, it is at risk from hackers. If your balance is discovered, you could become a target for hackers.

If this is a concern, consider running an Electrum server, which does not keep balance records but indexes all Bitcoin transactions equally.

I have a few questions.

1. Is there any special reason for keeping public keys and balances unencrypted?
2. Is it possible for users to encrypt this data without compromising core functionality?
3. Is the only reasonable mitigation for this problem “not using Bitcoin Core” and using Electrum servers?

thank you!