Some poor people cant afford the funeral with the wood, so they slide the bodies out there. Its illegal but out of desperation they do it so their loved ones can be blessed by the river in death and find peace.How do the corpses end up in the river? There are many pictures of dead humans floating around very bloated.From what I can gather, cremating a body and dumping the ashes in river wouldn't hurt a thing. It's also a cheap process if they do it like you mentioned.
I'm scratching my head wondering why they continue to bathe in that dirty water when people have screwed it over. Blinded by religion perhaps?
They bathe there because they believe the river is holy. Its a huge ass river though so everything doesn't take place in one setting. There's other places besides Varnasi to do this and people bathe anywhere the river goes.