redirection vs pipe – why it works and why it don’t

I have a encrypt function that goes like this:

encrypt -a aes -k key **-i input.file** -o output.file

which take in 1 input file and output 1 file as well.

By using pipe:

echo "abc" | encrypt -a aes -k key -o output.file

Q1) How does the “encrypt” function know or the OS know that the output for the pipe | is suppose to be the input for the encrypt function (so that i didn’t need to specify the “-i input.file” parameter) ?

Q2 Why does redirection works in this case ?
echo “abc” > encrypt -a aes -k key -o output.file

Source: unix

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