Well, limit sets a limit on how many packets total the qdisc will accept. To deal with low memory routers we default this to 1001 packets. If your router has more than say 64 MB ram you could increase that number. Just note by default each packet will require a full skb (socketbuffer) requiring 2048 Bytes of memory (same size for a 64B packet as for a 1500B one).
The latency target is related to codel/fq_codel, see https://tools.ietf.org/html/rfc8289#page-14 for details. Effectively, target needs to be >= the time required to send one packet through the link. The default target of 5ms will get into troubles once a links rate gets lower than around 2 Mbps, automatic selection will set target to be the maximum of the default 5ms or the time required to send 1.5 full MTU packets.
The advanced option strings are just there so that users can pass on options to the selected qdisc that are not already handled in sqm's GUI (like setting per internal IP-address fairness modes).
Hope that helps.
BTW the OpenWrt documentation has some pages on SQM that are worth reading....