Effect of rescaling of inputs on loss for a simple neural network

I've been trying out a simple neural network on the fashion_mnist dataset using keras. Regarding normalization, I've watched this video explaining why it's necessary to normalize input features, but the explanation covers the case when input features have different scales. The logic is, say there are only two features - then if the range of one of them is much larger than that of the other, the gradient descent steps will stagger along slowly towards the minimum.

Now I'm doing a different course on implementing neural networks and am currently studying the following example - the input features are pixel values ranging from 0 to 255, the total number of features (pixels) is 576 and we're supposed to classify images into one of ten classes. Here's the code:

import tensorflow as tf

(Xtrain, ytrain) ,  (Xtest, ytest) = tf.keras.datasets.fashion_mnist.load_data()

Xtrain_norm = Xtrain.copy()/255.0
Xtest_norm = Xtest.copy()/255.0

model = tf.keras.models.Sequential([tf.keras.layers.Flatten(),
tf.keras.layers.Dense(128, activation="relu"),
tf.keras.layers.Dense(10, activation="softmax")])

model.compile(optimizer = "adam", loss = "sparse_categorical_crossentropy")
model.fit(Xtrain_norm, ytrain, epochs=5)
model.evaluate(Xtest_norm, ytest)
------------------------------------OUTPUT------------------------------------
Epoch 1/5
60000/60000 [==============================] - 9s 145us/sample - loss: 0.5012
Epoch 2/5
60000/60000 [==============================] - 7s 123us/sample - loss: 0.3798
Epoch 3/5
60000/60000 [==============================] - 7s 123us/sample - loss: 0.3412
Epoch 4/5
60000/60000 [==============================] - 7s 123us/sample - loss: 0.3182
Epoch 5/5
60000/60000 [==============================] - 7s 124us/sample - loss: 0.2966
10000/10000 [==============================] - 1s 109us/sample - loss: 0.3385
0.3384787309527397


So far, so good. Note that, as advised in the course, I've rescaled all inputs by dividing by 255. Next, I ran without any rescaling:

import tensorflow as tf

(Xtrain, ytrain) ,  (Xtest, ytest) = tf.keras.datasets.fashion_mnist.load_data()

model2 = tf.keras.models.Sequential([tf.keras.layers.Flatten(),
tf.keras.layers.Dense(128, activation="relu"),
tf.keras.layers.Dense(10, activation="softmax")])

model2.compile(optimizer = "adam", loss = "sparse_categorical_crossentropy")
model2.fit(Xtrain, ytrain, epochs=5)
model2.evaluate(Xtest, ytest)
------------------------------------OUTPUT------------------------------------
Epoch 1/5
60000/60000 [==============================] - 9s 158us/sample - loss: 13.0456
Epoch 2/5
60000/60000 [==============================] - 8s 137us/sample - loss: 13.0127
Epoch 3/5
60000/60000 [==============================] - 8s 140us/sample - loss: 12.9553
Epoch 4/5
60000/60000 [==============================] - 9s 144us/sample - loss: 12.9172
Epoch 5/5
60000/60000 [==============================] - 9s 142us/sample - loss: 12.9154
10000/10000 [==============================] - 1s 121us/sample - loss: 12.9235
12.923488986206054


So somehow rescaling does make a difference? Does that mean if I further reduce the scale, the performance will improve? Worth trying out:

import tensorflow as tf

(Xtrain, ytrain) ,  (Xtest, ytest) = tf.keras.datasets.fashion_mnist.load_data()

Xtrain_norm = Xtrain.copy()/1000.0
Xtest_norm = Xtest.copy()/1000.0

model3 = tf.keras.models.Sequential([tf.keras.layers.Flatten(),
tf.keras.layers.Dense(128, activation="relu"),
tf.keras.layers.Dense(10, activation="softmax")])

model3.compile(optimizer = "adam", loss = "sparse_categorical_crossentropy")
model3.fit(Xtrain_norm, ytrain, epochs=5)
model3.evaluate(Xtest_norm, ytest)
------------------------------------OUTPUT------------------------------------
Epoch 1/5
60000/60000 [==============================] - 9s 158us/sample - loss: 0.5428
Epoch 2/5
60000/60000 [==============================] - 9s 147us/sample - loss: 0.4010
Epoch 3/5
60000/60000 [==============================] - 8s 141us/sample - loss: 0.3587
Epoch 4/5
60000/60000 [==============================] - 9s 144us/sample - loss: 0.3322
Epoch 5/5
60000/60000 [==============================] - 8s 138us/sample - loss: 0.3120
10000/10000 [==============================] - 1s 133us/sample - loss: 0.3718
0.37176641924381254


Nope. I divided by 1000 this time and the performance seems worse than the first model. So I have a few questions:

1. Why is it necessary to rescale? I understand rescaling when different features are of different scales - that will lead to a skewed surface of the cost function in parameter space. And even then, as I understand from the linked video, the problem has to do with slow learning (convergence) and not high loss/inaccuracy. In this case, ALL the input features had the same scale. I'd assume the model would automatically adjust the scale of the weights and there would be no adverse effect on the loss. So why is the loss so high for the non-scaled case?

2. If the answer has anything to do with the magnitude of the inputs, why does further scaling down of the inputs lead to worse performance?

Does any of this have anything to do with the nature of the sparse categorical crossentropy loss, or the ReLU activation function? I'm very confused.

One of the factors that rescaling gives a better result is on your weight initialization of the model. Your experiments run on the same model that using the same weight initialization (tf.keras.dense using Glorot Uniform). If your input is too big or too small the model needs time to adjust the weight.