My only 201 is a hand crank, so I have never tried FMQing on it! My first thought is to continue working on getting your machine to stitch properly before you even attempt to free motion or you will be extremely frustrated, especially if you are already getting loops underneath when you are reverse stitching. Most quilters I know prefer a verticle bobbin for free motion, but it can be done with a horizontal, drop in bobbin.
A couple of things to check- (you probably have already done this) - do you have the arm of the darning foot hooked around the needle clamp? Some darning feet hook on the clamp, others just rest on it. Not sure which you have. Have you reduced the pressure on the foot? The pressure should be loose enough so that the fabric can just slide freely under the foot even with the foot in the down position.
Are your feed dogs in the down position, or are they up with the stitch length set to 0? I use my 15-91 as my FMQing machine and prefer feed dogs up, stitch length set to O. But my 15-91 has a verticle bobbin, so not sure how that would work on a 201.
Hope you can sort it out. Let us know what you discover!
Linda