1. Its looking for an image here but no image named this is located here:
templates/bigpicture/images/darkbackground.png
2. You can add the below css to your custom.css file and adjust the height as needed:
#s5_header_area1 {
height: 202px !important;}
3. Yes, currently its looking for an image here named this but again the image doesnt exist: templates/frontpage1.jpg