When a new client tries to connect with wi-fi, it enters a password which is provided by the wi-fi owner. I wonder what is so hard to capture this password by a hacker when it is being sent to router for authentication? Client can't encrypt this password because symmetric key for encryption/decryption are not exchanged till yet. Only the password is sent which must be in plain text.
Second thing, now suppose multiple clients are connected with the same wifi. Why can't they read traffic of one-another? Are all of them using different symmetric key?
Is pre-shared key same as the password which your wifi owner provides you to enter? If it is a password then there is no sense to call it as key because there is a huge difference between a password and a key. Passphrase=Password but both are not equal to key.