There was a time, some months before I arrived here in July, that claps figured in the payment algorithm. That is no longer the case.
Claps do figure in the distribution algorithm, to the limited extent of my understanding, but it's not a simple relationship. If you are getting claps from a lot of different readers, your article is more likely to be included in the digest sent to readers and the "feed" they see when they scroll down in search of something interesting to read.
I've never heard of one clap being insulting, though I can see how some might take it that way. Many writers use a single clap to acknowledge comments, a way of saying "I read your comment" without taking the time to write a reply. I'll usually clap 50x for content I really appreciate, 10x for comments on my articles, and some other number if I'm not sure how I feel about what I read.
But you're absolutely right, reading matters to any writer far more than applause.