I THINK I can answer your 1st and 3nd questions.
1. Try going into Object maker, and re-create the objects. Go to the tab labeled 'Mesh', and type in the .mesh and the .material files into their respective text boxes. Then, go to the 'Object' tab and export them again to get them into the game. I don't know what you mean by 'floating grass'.
If you mean that the grass isn't natural looking on your terrain, then try changing the X,Y and Z measurments in Map maker. Pitch, Yaw, and Roll can also help.
3. As far as I know, as long as you credit the item's creators, then it it perfectly fine to use other's public downloads.