Hi! Thanks for your interest in the game, and your questions are good because they help review and refine the text.
- Spending a point in Lore allows a player to introduce a piece of knowledge to the fiction via their character, specifically something they learned (and perhaps when/where/how they learned it) which would be helpful to their current plight/quest/course of action. Wits is similar, but to introduce a sight/sound/sensation/smell which the character notices right here and now (or at least very recently in the immediate vicinity). The intention was to present something akin to Spout Lore/Discern Realities from Dungeon World, but in a token economy, not a roll for hold. Does that help? Is there any way you think that could be clearer in our text?
- Spotlight movement is very much a table culture thing which varies from group to group. One group might prefer initiative systems or clockwise order, or just jumping around based on character fiction and/or player enthusiasm, and each person's readiness to contribute. This game was working within a self-imposed word/page limit, so both this and any other table tools, including safety, were considered out of scope beyond the introductory paragraph assuming friends who share the table, and all that infers, including the assumption that it's usually fairer to dream up dangers and treasures for each other in equal measure, avoiding the inequity of people dreaming up too many treasures for themselves, and too many dangers for others.
Hope this helps in the short term, and perhaps a future release of the text will handle these specific concepts directly and/or in better detail. Have a great day, yourself!