Answer to Question 1
The difference is in the wall thickness. M is light wall, L is medium wall, and K is heavy wall.
Answer to Question 2
Mount the pipe in a pipe vise.
Cut the pipe to the desired length using the pipe cutter.
Use the pipe reamer to remove the burr left by the pipe cutter. Insert the correct die in the ratchet handle.
Apply thread cutting oil to the pipe.
Slide the die over the pipe. Make sure that the end without teeth showing is the end that goes over the pipe first. Also, check the direction of the arrow on the ratchet handle. It should be pointing to the right. If it is not, pull it out and flip it around so that it points to the right.
Apply pressure to the die with the heel of your hand while turning the ratchet handle. After one or two full turns it should not be necessary to keep applying pressure.
Continue to turn the ratchet handle, stopping every couple of turns to lubricate the threads and die with cutting oil.
Continue until the end of the pipe is flush with the teeth on the back side of the die.
Flip the arrow on the ratchet handle and turn the ratchet handle in the opposite direction to remove the die head.