That’s the important one.
Most of the time that makes no difference. The only time it does is if you bring up the UI during playback - with the setting set to Always, you will get a mode switch (and your screen will go back for a couple of seconds); the same will happen when you go out of the UI and back to the video. On start/stop only changes mode at the when you start or stop the video playing.
Setting that to Off will cause all kinds of problems, though, so don’t do that!
By default, there are no resolutions whitelisted (which is probably what you’ve got).
fzinken already gave you this link, but if you want to know more about the whitelist then I suggest you click here.
Maybe you don’t have Settings Level set to Expert?
But in any case, you only need that setting if your OSMC device is struggling to establish or maintain a stable HDMI connection with the display.