1. mechanical games ie. something that needs a mechanical device of some king to operate, therefore not emulatable. Fruit= Fruit machine.
2. You can hide games if you want, for example a mame game that needs a .chd file you don't have so doesn't work you can hide from view but is still imported.
3. Arcade games often have several versions for different markets or with balance fixes. if you right click some of your arcade games you will probably see multiple versions of the same game.
4. Its very slight and just adds a line around a image in launchbox.
5. In your arcade video folder is also a theme folder that video is probably in there.
Hope that answers your questions, if not fire away.