So sorry to have let this lapse!
For the headers/footers, you’ll want to use RTF or DOC format and then open in OpenOffice, not WordPad–WordPad does not support headers/footers, so it won’t show them. OpenOffice can read both those formats, so you’ll just need to either open the file from within OpenOffice or right-click the file and choose “Open with…” and then select OpenOffice. I’ve just double-checked and did not have any issues seeing compiled headers/footers this way.
Levels are about the binder hierarchy. Root folders in your binder, such as the Draft folder (it may be renamed “Manuscript” if you’re in the novel template), are considered Level 0. Documents and folders immediately within the Draft folder would then be Level 1, their children would be Level 2, etc. You can get a good visual by playing in the outliner a bit: Select the Draft folder and choose View > Outliner, then click into the outliner and select View > Outline > Collapse All. Everything you see in the outliner at that point is Level 1, inside the Draft folder. If you click the disclosure arrow for one that has subitems, its Level 2 items will display. If one of those has a disclosure arrow, clicking it will reveal its Level 3 items, and so on.
In Compile’s Formatting, “Level 1” formatting applies only to the binder Level 1 items of that document type, not their subdocuments. “Level 1+” means that the formatting applies to that document type at Level 1 and all higher levels. So in a basic compile set up, you’d just have each document type set for “Level 1+”, meaning that all folders will be formatted the same, all document stacks will be formatted the same, and all single documents will be formatted the same. For a more complex set up, for instance when you use different levels of folders in the binder for “Parts” and “Chapters”, you’d likely have at least two levels of folder formatting, “Level 1” and “Level 2+”, allowing you to format Level 1 folders differently from the others.
Different elements (title, text, notes, synopsis, meta-data) can have different formatting, so it’s possible you set the text formatting for all the levels but missed the “title” on one of them, so it’s still coming out larger and bold. Click into each row in the table at the top of the Formatting tab and take a look at the formatting in the sample preview window below. Do you see the larger, bold font appearing on any of them? If so, click the “Modify” button, then click on the mis-formatted sample text to select it and reformat it.
Make sure also that the “Override text and notes formatting” checkbox at the top of the Formatting tab is ticked.