1: Yes. Setting it to 0 means you can move the mouse and idle mode won't be cancelled/put off.
2: Setting it to 0 means vacuum won't happen automatically–you will have to run it yourself from database->maintenance->vacuum.
Thank you for asking about this. The logic of this panel is a bit hacked up due to several recent changes. I'll rewrite things to be clearer.
Tags from the local tag service and tag repositories are merged together for most views, so if a file has tags on my repository, you should generally see them no matter what local tags you have applied. This 'merged' view is often labelled as 'all known tags'.
Note that my public tag repo isn't comprehensive, so even if a file is popular and on a booru, if a hydrus user hasn't imported or manually added tags, it won't have any tags yet. If you are a newish user, it could also be that my repo has the tags, but you haven't fully synced with it yet. You can see your sync progress in services->review services->remote->tag repos->[public tag repo]. If you are fully synced and there still aren't any tags, please add some!