I think R7AC001 is the branded firmware version and that is why there are no patches for it. In order to use XS++ to flash/update your firmware, you need to install the USB driver which it appears you have done already.

You have 2 options really for firmware, R6BC002 and R8BE001. R8BE001 is the latest but has the light illumination bug that has plagued all firmwares after R6BC002. I use R6BC002 because there is no light bug with it. R8BE001 doesn't have many patches though, so you could flash R8BA024 which is the second most current firmware. It still has same bug.

Yes, you will need to download your the firmware of your choice and will need the FS file, MAIN file, and custpack.

Depending on your wireless provider, i would also suggest editing AMR to disable AMR-HR if you have AT&T as the sound quality is no good in my opinion.