i can’t help with your USB stuff (I run my games directly from my USB stick rather than using the transfer service), but with you second question – what you mean by “video output setting” – the “retroarch render resolution” accessible within the https://github.com/RetroPie/RetroPie-Setup/wiki/runcommand ?

if so, i run that at ‘video output’ (which is whatever your TV is running at – for me it’s 1080p) with no issue. the only way it should cause slowdown is if you’re running shaders, which I don’t.

memory split – i think 256MB is probably best, although the only thing it seems to affect is emulation station (issues with lots of system pictures)