Both questions are far from being silly.
I can't answer the first one but also believe it's necessary.
This well hidden document may help you with the second question:
https://www.boonex.com/trac/dolphin/wiki/DolphinAdminMembers
My interpretation is:
If the Preserve Profile status is unticked, any changes a member makes to their profile will be bought to the attention of Admin. Their Status will also change from Confirmed to Approval, giving Admin a chance to read the profile and deal with it as necessary. It will be up to admin to accept or reject the changes. I'm guessing the original profile will continue to appear until the changes are approved. That happens on another site I belong to and it's a great way to ensure members don't fill their profile with spam.
If Preserve Profile Status is ticked, members can make changes to their profile whenever they please and Admin isn't notified. In other words, the profile status will remain Confirmed. This is fine for sites where spam or abuse isn't an issue and members are all trusted.