Pick a license (MIT, Apache 2.0, GPL v3, BSD, or ISC), enter the copyright year and holder name, and the tool fills in the official license text with your details in the right placeholders.
MIT and ISC are the most permissive for open source; Apache 2.0 adds patent protection; GPL v3 requires derivative works to stay open source. Pick based on how you want your code reused.
Yes, as a starting point — review names, paths, and details against your actual project before committing.
No. Everything is built client-side in your browser; nothing is sent anywhere until you commit it yourself.