1) Means that the humidity and temps inside the box are higher/lower than that of the outside. High humidity but lower temps than outside the box create the condensation. (Nothing to really worry about other than dripping on eggs)
2) Well... yes and no. I would stick with 90% and up, and honestly wish you luck in getting 100% humidity stable in your incubator (I can't do it... And I tried)
3)Yes and no, again. Some people don't cover it at all with plastic, and some do. Depends on who you talk to. If you do, however, I'd suggest at least once a week burp the plastic wrap... It's really a matter of keeping your airflow fresh depending on how you have your incubator and egg tubs.