Hi! Sorry to hear you've been having a hard time with the tool. Have you imported the "Demo.html" into Twine 2? Is there anything confusing about how it's set up? Or do you find the options in the tool the confusing part?
Secondly, I'm not able to repro an error when "<<set $variable to 1>>" is used. Do you have "Define variables" enabled under "Characters and variables" in the Twine to Ren'Py UI? If so and you're still seeing problems, if you're comfortable giving me the file or an isolated repro case, that'd help me in narrowing down what might be wrong! If you can export the Twine to file, get the incorrect .rpy output files, and a screenshot of your tool settings before you hit run, you can send them to jbtuason at gmail dot com, and I'll take a look.