@tfb: Hi I'm really sorry your post wasn't being ignored but it's always best to start a new thread rather than have it on an old one. Please accept my apologies in the delay in the response to your question. I'm sorry it wasn't responded to.
I have asked this theme's developer to have a lookie about this one as I took a look and what you want is a little complex in parts and I want to be sure we give you the right steps and make sure it's ok / doesn't impact in you doing it.
I can help with your other points though.
That css file custom.css is one you can create yourself if you want to add custom css - you can either do that or use the child theme. We would suggest ideally you use the child theme and if you infact want you can in style.css remove that line calling that file if you do want.
I'm a little confused about the last point so my apologies on this one. I think you are talking about sub pages yes and the fact they do not show in the navigation bar? If that is the case the navigation does not actually use sub navigation it only uses one level therefore currently this is why.