Hey questfulmind,
The number of questions you answer correctly is your raw score, which is then converted into a scale of 8.
And yes, there is a punishment for not completing all the questions in the IR section.
However, generally speaking, you want to score decent enough on the IR section so as not to draw negative attention to a low IR score.
You don't want the admissions committee to focus on a really low IR score of like 1 or 2 -- that shows lack of effort or ability
That said, it's not that much more beneficial to have a perfect 8 versus a 6 or 7.
So ideally, you want to stay in the 4, 5, 6, or 7 range to efficiently get a score that is decent without putting a crazy amount of effort.