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These are all great questions we should be asking policy makers who cite 'economic growth' as justification for policy. In this context, 'economic growth' refers specifically to GDP growth. Who benefits most from GDP growth? Tobacco companies provide billions to GDP annually but also contribute to increased public health costs that everyone has to pay for in one way or an other. Growth for the sake of growth doesn't necessarily lead to the best outcomes for all of society.
The rate of return on capital is a macroeconomic aggregate of the overall rate of return that capital generates. Capital is any asset, so the rate of return on capital is the average rate of return on all of the machines in factories, all of the money in government bonds, all investments in the stock market, literally all capital of any form in an economy that is used for production or savings.
Western economies operate in a form of capitalism, which by definition means to maximize capital. So realistically, all producers in capitalist economies are incentivized to maximizing returns on capital, that's the goal.
But if we change the goal from maximizing capital to something else, like maximizing human well-being for example, than there would be less incentive for producers to constantly try to earn greater returns on capital and the growth rate of the economy could then surpass the rate of return on capital and inequality could decrease.
So in this case, investing money in libraries, schools, hospitals, transit, infrastructure etc. would generate growth without the expected rate of return on capital associated with that growth.
This is an other option to reduce the wealth gap, as was asked by OP.