I think you may be misremembering. I was a bit unsure myself because I don't use this functionality too often, so I installed the older versions and tested, and none of the generated maps had links back up to the parent map.

Could you be confusing it with the html export (from the same dialog)? The HTML export do have the controls you talk about (parent, up/down/left/right)

Try changing the style of the arrow heads, Tools -> Set properites -> Arrow Heads. The default settings are often WAY to small....

Or for the prettier arrows, use the WARROWD command.

The character set in map notes only does standard ASCII characters, not the entire Unicode range, so it has certain limits what will work or not.

You can easily test yourself if anything is necessary to remove by creating a new map note in a map, paste in your text, and then open it up in the viewer (the blue window) afterwards.

That's completely up to you.

The main thing I very strongly encourage when making a non-overland map, is that there is a symbol (or equivalent) on the parent map to link it to. No making an inn and linking it to a blank spot near the road on the parent map because "there could feasibly be an inn here". It is the mappers responsibility to place interesting places in their maps for others to link from, and if no marker for such an interesting place exist on the map, well, then an intermediate map may be required. So generally, the idea with an intermediary map is to make up for "shortcomings" of the parent map.

I am guessing fewer people have the free version simply because the annuals have more reach to customers not part of the community, but on the other hand, they are free, so anyone can get them without purchasing anything.

And yes, I used the free ones for my map. They're listed among the allowed resources here (the "Free Addons" section).