regarding the fact that you do not know they are not stupid questions.
I’ll try to do my best:
The Pickups in your guitar produce a very weak electrical voltage signal. this signal has to be amplified to drive a speaker. Thus the amplifier.
So basically the tubes do amplify the signal, just as transistors do. You take the voltage signal from your guitar and multiply by the gain factor.
Now it gets interesting:
-real world components are not perfect, so the gain factor is not a constant. And as the output voltage reaches the operating voltage we run into saturation and further amplification is no longer possible. So the input signal “gets bent” and we have: distortion.
Tubes produce distortion that is more or less pleasant to the ears, as they do not simpy cut off the signal at that voltage level.
What ist “the best tone”?
It’s highly dependent on the listener, the music to be played, the input signal from the guitar and so on. I would probably start with the tone controls at around 7-8, guitar volume fully open and the gain (pre-amp) at the edge of clean/overdrive.
Control the overall Volume using the master volume of the amp. The guitar volume control can be used to clean up the sound from overdrive to clean, but ignore this for the initial amp setups.
Yes and no. It is not normal and needs treating. For an old amp left in the cellar for a long time it is perfectly normal. Try turning all controls from side to side for a while. If it does not help you can use a contact cleaner spray and keep your fingers crossed.
Have a looper pedal? Connect guitar → looper → amp, record a riff and play with all the controls on your amp until you find something that sounds desirable
Fixing the scratchy pots is probably the most important thing.
Watch this vid:
Make sure the amp is off and unplugged before you disassemble it.
Start with cheap electronic cleaner to clean up all the dust on the PCB (the board with all the electronics in the amp) and do a prewash of the pots so you don’t waste the good stuff.