Answers as best I can remember:
1. Can someone explain the keep the encrypted keystore wallet file safe? I dont get what this means. I assume when you download the wallet, its already on your laptop right?
Your wallet is basically an address and private key. That's it. Everything else is fluff. Basically the address is needed to send ETH to you, the private key is needed to send ETH elsewhere from that address. Think of them as an account number and security key. MyEtherWallet also generates another file which will convert your chosen password into your private key and uses this to unlock your wallet. It just an extra security step because memorising your password is easier than memorising your private key, and means you won't be copy-pasting or storing an important password
If you lose either your address or key, you're screwed. You cannot access your ETH any other way, so is is suggested to have multiple physical and digital backups in secure locations.
2. When they say back it up in multiple physical different locations, can someone explain this to me? This is an online file right? So what do they mean by this? You mean make a copy of it and put it in an external hard drive? And also have one in an online cloud service like dropbox? If not, what do they mean by this?
You can write or print the address and private key on paper, you can store them in a text file on a USB drive, or anywhere else you think is secure. They are offline files
3. When they mention private key, is that the password that you created?
The private key is derived from the password you chose, but not the same
4. When they ask about printing a paper wallet, can someone explain this? Do i need a printer right now connected to my laptop in order to print this paper wallet?
Literally this just means printing out the address and private key, as these are all you need to use the wallet.
5. The other options are saving your raw private key or saving a QR code of your private key. Can someone explain me what is meant by this?
If I remember rightly, raw key is the plain text of your key and the QR code is just an image which can be scanned to reveal your key.
6. I don't think i would want to print a paper wallet as i do not want to keep a copy of it in the apartment etc. Do you guys agree/disagree with this?
Ultimately you are responsible for your own security. You will want a multiple backups for if your laptop dies, apartment burns down, etc. If you plan on storing online, are you comfortable with the idea that if someone gets the password for your google drive (or whatever) they'll be able to steal everything from your wallet?
7. So there is no 12 word phrase like electrum?
Nope
8. So if you don't keep a backup copy of this wallet and even if you know your password, that means you won't have any access to your ETH anymore? So basically you have to make multiple backup copies of it because if you don't, and any of your copies are destroyed or loss etc... then you lose all your ETH? For example, you have the wallet on your laptop of course. But let say you make a copy of it on an external hard drive and thats all. So if computer has problems and external hard drive has problems, then you lose all your ETH no matter what? With Electrum with bitcoin, as long as you know that 12 word phrase, that is all that is needed. Thus even if you don't have any backup copies of electrum on your external hard drive or anywhere else, well the 12 word phrase would allow you to restore your electrum with bitcoin.
In order to use your password, you MUST also have the file that goes with it and your address
If you memorise the private key instead, you do NOT need any file to go with it, just the address
Your wallet contents aren't really on your hard drive. They're online in the blockchain. What's on your hard drive is the information required to access the account. When your laptop explodes, you've lost the info you need to open it up or move funds. If you have another backup of your access info, you can still access the wallet and all it's contents.
