1. It's usually a dirty rotary switch inside the motor that causes issues. Removing the motor, dis-assembling the switch and cleaning / re-greasing it usually fixes the issue
2. The newer clusters just have High-Low, the older models have the numbers. The gauges are not very accurate to begin with. Test the connector at the fuel pump and see if the sender is putting out the proper signal. I had a gauge cluster back in the day that had a cold solder joint on the gas gauge that caused malfunction.
3. Red button in the trunk is the inertial fuel cutoff switch. If your car is in an accident it will trip to cut power to the pump.
4. I think the XR2 is rated to use 87 octane, I used to use premium in mine, but I was running higher boost. I believe I run mid-grade in my beater XR2