Use preview files should not be used. Frame blending should only be used in specific situations that require interlaced material to be exported as progressive.
No. That's only if you want to use rendered previews as the source for your encodes. About 99.99% of the time, you don't want that; it will result in lower quality exports, as you're using "precooked" files.
"Use Frame Blending?"
Depends. This is a global switch that you may or may not want to use when your export has a different frame rate that your source sequence/footage. It forces frame interpolation (blending) using two or more discrete frames to create new frames. The exact times you'd want this vary depending on your destination and preferred output look.
The help docs say this about Frame Blending:
Select Use Frame Blending to create smoother motion by blending adjacent frames when output frame rate doesn’t match input frame rate.
Smoother motion, yes. Blurry video, sometimes.