Traders do carry masterworks items, but yes, they're not that common.
Items are gradually replaced over time, but I don't know if there are replacement timers, or if a random set of items are removed and a random set of items are added (in which case an item might disappear the next cycle, or it might take decades).
Items are definitely placed in at least two groups, as seeds and agricultural produce follow the natural yearly cycle, while the manufactured items don't. Item replacement is slow enough that you can mark villages that have desirable items, work to get the means to buy them, and have a good chance to actually find the items still remaining in the village. Thus, if game calendar time is the important factor, traveling wide (in particular to Driik) will get stuff a lot faster than waiting for goods replacement. Foreign traders are good in that groups travel through and then disappear, so each new group will have a new set of goods, although their item selection is limited to what can be called "weapons" and armor. Don't expect to find carving axes in their inventory, but ordinary axes (primarily for felling trees) are somehow sufficiently much weapons for them to be carried (at least that's my reasoning for why their selection is the way it is). Foreign traders also carry jewelry (high value per unit of weight).