Q1. The target rate is used for when using semi-deviation below this rate and probability of achieving it in the results. It has no impact on optimization otherwise so can be set freely such as 0%. The risk free rate should be what can be earned for the time period used, so if months, the 1 year government note rate divided by 12 is a good proxy.
Q2. The results show the optimized average monthly return and then the target is used under Monte Carlo simulation to calculate the probability of achieving it under the current and optimized portfolios.
