1) pelvis down axis is the local axis of the pelvis that points down. It is used in the PendulumExample script to calculate the normal hanging direction.
2) which part of it is twitching, could you please make a video or something? Could be something about the way the ragdoll was set up instead.
3) Yes. Make a duplicate of the "Target" GameObject, remove TransferMotion.cs from it. Move it to the position of the right hand. Then go to the FBBIK settings and set "Mapping Weight" to 1 for the right arm, assign the ragdoll hand as "Target" and set "Position Weight" and "Rotation Weight" to 1. Like that you can have a target for the right hand, works the same for the feet or the body.