gps works.
GPS flight modes are an advanced topic. You should get it flying well in Atti, Atti, AxisLock, Manual(throttle) first. The problem with that is that it drifts and you have to keep it from drifting away. The GPS flight modes you are used to hold it right where it should be, even in wind. You are used to a self driving car, and now you have to drive one that requires constant attention and corrections to not drive into the ditch.
1) Is there a way to set the drone up for return to home?
That is a GPS flight mode and in my opinion, should be done later. The one thing you must do now is set your failsafe so that if it flies out of range, the motors stop.
The other question is does the drone mark the home position when it acquires a GPS fix or does it always have to be manually assigned?
Yes. When you fly from a new field it will return to that field.
2) How do I tune the quad so that it is super stable?
As the other post said, use defaults. They are fine. You don't tune a car differently for a new driver...
That means using defaults, not using a "cloud configuration."
3) How do I make it so that if I cut the throttle to zero it won't fall out of the sky while at the same time making sure that once armed it wont take off immediately. The HS700, with the throttle all the way down will slowly lower.
Well what you want there is "Altitude Vario" thrust mode which is best switched to once flying, but again, start with Atti, Atti, AxisLock, Manual(throttle). Zero throttle will stop the motors, but for now that is probably a safety feature that should be left active. There is AlwaysStabilizeWhenArmed, but there are many cautions for it that should be researched. Learning to hold a reasonable altitude with sensitive throttle stick is probably the first thing you must learn, even before learning to keep it from drifting away.
4) Is there a way to automatically set it to hover? My HS700 controller's throttle is spring loaded to return to hover. The new one is not so it would be hard to just let go and have everything stop and hover.
When you eventually set up "Altitude Vario" thrust mode, the center 20% of the stick is dead band, so anywhere close to center is exactly center. For now, using Manual throttle, learning throttle should be your first concern. You are doing well when you have found that this click on your detent throttle is slowly coming down and one click up is slowly climbing. Then a hover is just clicking back and forth once in a while.
May I suggest that you read this:
https://forum.librepilot.org/index.php?topic=4408.0