We vote for members of parliament who then elect the chancellor by majority vote.
So yes, the chancellor is not directly elected. This method ensures the chancellor always has a majority in parliament this avoiding periods of deadlock. Also keep in mind that the chancellor is not nearly as powerful as the president in most presidential systems.
Aren't they both the same thing? A VPN is just applied encryption.
You're right though, banning encryption is a pipe dream. Encrypted data is not distinguishable from random noise. So you're not allowing me to send around random numbers now?