There is a report on the "Referral Program" page at the bottom of the page where you can see who has earned what and what payouts you need to make.
You need to manually do payouts. For PayPal and Payza there is an export to CSV option which allows you to make all of the payouts at once.
You can modify new downline notification, new commission notification without any issues. You should not turn test payments on except if you are doing a test payment. While test payments are on real payments will not work and vice versa.