1. The FSO settings for the mod you are currently using control. So, for example, if you're playing Blue Planet, the FSO settings on Blue Planet take precedence over the FSO settings for the MediaVPs. There is also an option to set up global settings for all mods in the Knossos settings section, but you don't need to use it.
2. Those flags are all controlled by the FSO settings, so you should be able to turn them off in the check boxes (not that it matters--the mod settings will overwrite them)
That old command line will work if you copy and paste it into the custom flags bar in the FSO settings menu for the mod you want. Just bear in mind that the lighting settings for FSO have changed in recent nightlies. Some flags have been deprecated, and others have been tweaked in how they actually affect the lighting. You may need to adjust them.