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The DR percentage confuses me a little...plus the image size. I thought the DR increase would bring down the resolution, but apparently it didn't...
Yes, the menus are confusing. I have the DR setting set to 400%, that is why I have the camera after all. I have not heard of any negative effect from this setting, although the images may look a little flat. The Contrast knob should fix that, the important thing is that the information is there.
Here is a page with a decent description:
The resolution is really 6MP, which corresponds to the medium setting for JPG file sizes. Large gives an interpolated 12MP image, which isn't worth the trouble. Not only is it interpolated between RGBG, as with all Bayer camera, but also between S and R pixels, i.e. highlight pixels and shadow pixels. The 12MP is not really sharp. I think that Fuji added it because they were afraid how a 6MP camera would be received. The 6MP images are beautiful though, and print well. You won't make wall-sizes prints though, keep that for a D800 or an IQ180