very sorry i made a mistake. these folders are hidden and they're created during the process of making w10 iso file with media creation tool. i have no idea where the update file is located.
yes i think you can proceed. it's better to use offline upgrade (meaning get w10 1607 iso file, then run setup.exe in the iso to proceed)
no it's not. it should show the correct ram size.

Abnormal. ~4GB utilize is about right for 64-bit.
You can check what ate up the memory by clicking "Open Resource Monitor" beneath that window.
In case of no task been listed, it might be some kind of memory leak bug from certain running application.
Might be a good idea to look up your start up applications (also under task manager > Start-Up)