1. The terms romantic and romance refer to emotions of love as conceived in western society. They refer to the idealization of another person, and of a relationship with that person. Other ideas of love have been advanced by several philosophers and have been popular in different cultures.
A romantic relationship may involve sexual behavior, but the term puts more emphasis on the emotions than on the bodily pleasures, and as far as physical intimacy is involved, less emphasis on the intimate parts.
2. Romance as a genre of literature is a complex term. Initially, the term applied only to the 'romans' (narratives) of Anglo-French literature. These were rooted in the story of the founding of Rome, which was itself rooted in the Homerica. Thus, stories of Aeneas, Brutus, and Romulus and Remus were "romance" subjects. The stories of King Arthur were included in this genre, since Arthur is supposed to either be derived from Rome or to have been one of the sackers of Rome. Therefore, "romance" poetry included all chivalric tales.
By the Renaissance, "romance" referred to any courtly tale, and especially narratives and prose. This designation survives in the French usage of "roman" to refer to the novel. By the 17th and 18th centuries, "romance" had come to mean any long narrative, whether it had courtly or erotic content or not. Thus, Fielding's famous description of his Joseph Andrews as "comic romance" or "a comic epic poem in prose" was a way not of indicating that his novel would have erotic love in it, but rather that it would be a narrative.