The difference between "factory" and "sysupgrade" is simply about where you're starting from... vendor OS or recovery method vs already running Openwrt.
Depends on the situation. Usually you can keep your settings if you want, but you don't have to. In some cases, you must allow it to reset to default (depending on what the previous firmware/version is).
Not enough info to know why. Did you flash the factory version while already running OpenWrt? If so, that's a problem -- you should be using the sysupgrade image.
There should be plenty. Your device has 128MB of flash. 24.10 only requires 8MB for the basic installation.