You need to be on the page you wish to set as homepage; then go to where you have described above; and it will show a button "Use current page" (or something similiar).
Click, its now set, save and exit.
Yes, it will.
Hotspot = can only use wi-fi.
Internet = can use wi-fi when available, uses carrier network when not available
O2 active = WAP browser. [which you may be charged extra for using]
"That's it then. Cancel the kitchen scraps for lepers and orphans, no more merciful beheadings... and call off Christmas."