A) Security will come into play eventually if you are installing version 2.7.1 on anything other than a development server. 2.7.1 is exploitable and if exposed to internet traffic, in all probability will be exploited in time.
B) File permissions, with very few and usually temporary exceptions, all work well with directories at 755 and files at 644. You may at some point encounter one or two temporary exceptions that deal with upload folder creation, or temporarily making a file writable.
C) I suspect if that ("I am missing the "Front Page Displays... options on my Settings Reading panel; it begins with "Blog pages show at most...) is all that is missing, then an interrupted or incomplete ftp transfer may be the most suspect item at this point. I think I would start there. If this is going to be live site, I do recommend using 2.8.4 instead of 2.7.1.