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For #1, Alteryx has a cool feature whereby when you select a file with a known extension, Alteryx will automatically be able to read the file in. As you've come across, this causes problems when the filetype is not a known file type (txt is not a known filetype since we're reading it in a csv). In order to handle a txt file, I've made an adjustment in the attached: I added a condition tool and an action tool. The condition tool makes sure that just one action tool fires off. The action tool that I added will just replace the filename and not change the extension (which is what your original action tool is doing by default). This should allow you to read in all known file types (csv, flat, xls) plus txt.
As for #2, I would reach out to firstname.lastname@example.org. Unless we're both missing something, I'm not sure why it's adding the table1 business to your yxdb. I tried assorted workarounds with no luck. I think you have it setup correctly. I'd be happy to hear I'm wrong and this one so that I can learn something new!
The jobNew Workflow1did not complete successfully and resulted in the following errors:
Error creating the file " D:\ProgramData\Alteryx\Service\Staging\11436_c5b330b3e7604c67809483f466c6e6d8\Test_Output.yxdb|||Table1 ": The filename, directory name, or volume label syntax is incorrect. (Tool Id: 8)