YAY!!
These old girls are such fun to use!
1 & 2 You could have a wiring problem...what do you mean by "touchy"? If it's that the machine hums and hesitates when you first start, I was taught to always "start" the machine by pressing the control and at the same time starting the wheel (I call it "throwing" the wheel) by hand. So lightly press on the controller, and at the same time reach up and turn the handwheel... That may be something that loosens up with time, or you might also have a loose belt.
Your manual zig zag looks better than mine!
For your question about not having a free arm, they're convenient, but not imperative! You don't have to stick them around the bed of the machine, leave them right side out, open the bottom of the leg, put the fabric of one side of the leg under the presser foot, and push the rest to the left. As you stitch around the leg, keep pushing the excess fabric to the left.
Does that make sense?