2. I see now. I have turned on the Force Inline styles option on the compatibility settings submenu, because I was suspecting some kind of stylesheet issue, now the results show up in a block under the widget. You will still need a different instance for the menu, as I hihgly doubt it will work there as well.
4. I think we have a missunderstanding. That field is for excluding the categories, not including them. By default every category is included.