[Plugin: 404 Redirected] Root "/" 404's and Google Webmaster Tool Crawl Errors

First thank you for this plugin! Working great. A couple questions:
1. I have a lot of crawl 404 errors in my Google Webmaster Tools – will this fix the issue for the crawling or does it just fix the link for humans, not bots?

2.I have a bulk of my hits for 404 errors at the root “/”. The automatic redirect is sending this traffic to a post 6 months old, skipping over dozens of newer posts. Is it looking at link text to guess this or how is it making that guess? Secondly, why would “/” show a 404 error if that is just my homepage?

3. I assume if I deactive the plugin all the redirects will stop and cause 404 errors again, yes?

http://wordpress.org/extend/plugins/404-redirected/