1 Perhaps back off the nut a bit more and tap harder - there's still space between the nut and washer and not enough space where the cable is (see arrows in pic). You need to think about what you are trying to accomplish with the instructions we've given you. You can also try using a flat blade screwdriver to increase the space where the cable is, or even sidepull cutters to wedge it open.

2. That brake q/r is indeed not working properly. the plate with the two holes in it and the matching one in back should be sitting under the bottom of the adjustment barrel. Note how the plate is not sitting fully on the cylindrical part. The brake is not going to work or adjust properly until that is fixed. See pic -

3. Any bike co-op nearby, knowledgeable friend, or (horrors) bike shop that could help you? There may be more challenges to this bike and I think in-person help would be valuable to you.