Safe Z is where the Z will raise when you ask the machine to Go To Zero via the button. It will also be used if you do a Run From Here, the prep move box will pop up and when you Ok the safe Z will be used, ie Z will raise, X and Y will move then Z will lower. I personally prefer Safe Z to be set in Machine Coords and have it just below my Max Z height. You can also have it in Work Coords or even have it an incremental value but I dont like these myself.
Not really sure what you are meaning by rules for best practice for Drill/Mill.
I usually look up the manufacturers info for the cutters I will be using.
Hood