ePub 3 is very different in the way you set it up, since it is entirely built around CSS and styles. The editor formatting will not be used and you will need to set up the formatting in the Compile format. The built-in “Ebook” format should do a very good job and is the best place to start. If you want to change that (after assigning Section Layouts if necessary), then duplicate and edit the Format and take a look at “Section Layouts”, “Styles” and “CSS” - those are the panes that will determine how your ePub 3 book looks.
The “ePub 2” option will eventually be removed, since ePub 3 is better through and through, but the former has been left in for now so that users can carry on using the older way of using editor formatting while getting used to the CSS approach. The CSS approach allows much more flexibility for ebooks, though.
All the best,
Keith