I created a simple project to test and it worked fine. Here is what I've learned:
1) It doesn't matter. The default is fine.
2) I have yet to see "Automatically manage signing" work. Perhaps that is because I'm writing Developer ID Mac apps.
3) Yes. Manually shoving in correct values seems to work.
4) No such problems on the demo project. Perhaps I just need to rebuild my mess of a project and this problem will go away.
5) Works from either archive build or debug. See below.
6) iCloud Capabilities tab is happy in demo project.
7) The documentation is wrong
8) WWDC 2016 is correct
Here is the key point. It may have been working the first time I tried it. iCloud is "smart" about where you are running it. When you save on device A, you will not be able to read on device A. Nothing has changed on device A, so why would you want to get notifications there? But if you run it on device B, you will get the changes from A. If you run both A and B simultaneously, then you can save on one and load on the other.