The term backporting means (by definition) rebuilding existing packaging on an earlier version of the system.
Why is that "backporting process does not consider upstream releases"?
Packaging a previously unpackaged software release is not backporting.
What is the advantage of downstream release over upstream ones for backporting?
I'm not sure what you mean. What do you mean by the terms "downstream release" and "upstream release"? Normally a release is a term used only by upstream. A packager does not make a release, he/she only packages it.
In the link, the term "upstream release" is used. This means the release of the software, and there the word "upstream" is redundant and is probably used for emphasis. The term "Ubuntu release" is also used. This means a release of the Ubuntu distribution. That is an aggregate term, referring to the packaging and distribution of a large number of software packages at once as part of the release of a new version of an operating system. Packaging a single piece of software is not normally termed a release.
Perhaps you are asking, why not package a new release directly, rather than backporting an already packaged release. The answer should be clear: this typically involves less work, since some of the work has already been done for you by the packager. Having said that, it is often possible to reuse packaging for older versions of software with newer, previously unpackaged versions.
By "upstream releases", does it mean the raw (not for a particular Ubuntu release) source code release from the original author of the package, available from the package's website maintained by the original author?
Yes, of course.
To do backporting, is it necessary to create an account on launchpad.net and create a PGP key, as said in the link?
No, of course it is not necessary. You can do anything that you could do on Launchpad on your own computer, modulo hardware constraints. Lanchpad does not have magical powers.
See the backports tag for further information.