Hi Mark
In Normalise Estimate and Write the 3 parameters you mention seem ok to me.
Regarding your 2 questions,
(1) Yes, you can use the _sn parameters to normalise the functional data of that subject. However, a lot of people in the SPM community are now moving towards DARTEL for normalisation (when you have good quality anatomical scans). See the SPM manual Chapter 26 for information on the DARTEL tools.
(2) No, Not quite. Coregistration does no warping to the image, it just moves it around (for example, to make sure that your anatomical image is well registered with the mean EPI volume in space for a given subject). Normalisation does a set of non-linear transformations to warp the image to best match the template (in the ICBM/mni space for example).
I recommend that you have a look at the example analyses in the SPM manual Chapters 28-30.
Hope this helps!
Ian