digitalnature

post a link to your site please

try removing
add_action('mystique_jquery_init', 'mystique_highlight_search_query');

from functions.php

how did you add the adsense code inside the posts?

go to your theme settings – the advanced page, and in the user functions field paste:

<?php

function newsticker(){
  if(is_home()) insert_newsticker();
}
add_action('mystique_header_end', 'newsticker');

try replacing

...no-repeat right bottom.....

with

...no-repeat -50px bottom....

you might need to change the -50px value

1. when you upload a image that you later set as a thumbnail, it has to be at least the size you want your thumbnail to be. if it’s smaller, it will display like that, it won’t get enlarged.

after you change the thumnail size, run the ‘regenerated thumbnails’ plugin.

2. no, unless you change code
3. same here, but selecting posts from a category will be possible in the future.
4. there’s no reason to show thumbnails on single post pages. thumbnails are meant to act as previews, teasers…

you shouldn’t edit theme files.
mystique has a ‘user functions’ field in the theme options where you can add your php code, just like you would by editing the functions.php file