No problems. If you've got a short head tube it's allways worth keeping a few above the stem in case you change frames. I personally never cut a steerer till I'm entirely happy and usually end up with 1 or 2 spacers above the stem as I'd rather cut a touch long than short.
Mmmmmmmmmmmmm at the risk of erm sounding condesending but a £99 fullsusser is NOT a superb bike nor will it ever be. In fact being frank it's a complete waste of £99.
Sag is the amount the suspension compresses due to your body weight when static on a level surface. Setting it up on a £99 Fullsusser will be an excercise in futility but normally you adjust it so it sags about 20% of the travel.
you've either contaminated the brakes are more likely, somehow, misinstalled them. Avids are seriously quiet brakes ( in fact the only time they usually make a noice is, as with most disks, when wet ).
Agreed, when I bought my son a bike I specifically avoided fads. In fact I went for dirt simple in the shape of a BMX. He loves it although I did have to change the cranks to something half way between adult and the installed length, because the short stock kids cranks don't give enough leverage and he kept running out of grunt.