Your questions pertain to the transmission of power. If only resistive loads exist, then only real power transmissions would occur. However, because of inductive and capacitive loads, not all the power supplied by the utility is consumed. These reactive components will reflect back the reactive power momentarily borrowed. This means the apparent (complex) power or total power supplied by the utility is a vector sum of real and reactive components.
The “Load Angle” is best seen after one models the real power on the X-axis, reactive power on the Y-axis, and the apparent power (complex) power as the vector sum or hypotenuse. The power factor is the ratio of the real component of power to the apparent power (hypotenuse) which is also the cosine of the Load Angle between the real component of power and the apparent power (hypotenuse).
As to “How to improve the power factor”, most utilities install capacitors near the service area to compensate for the reactive power borrowed by the reactive load.
Two great references:
1) Mohamed A. El-Sharkawi’s book: Electric Energy – An Introduction. Second Edition, Published by CRC Press
2) American Power Conversion (APC.com) White Paper 15 “Watt and Volt-Amps: Powerful Confusion” by Neil Rasmussen
