Well, you bought a pretty large loco, so a bit harder to get started with since it will require more from you in terms of electronics and trackwork. The MTH system is also proprietary (at this time) so you might consider if you want to convert your next locos to it, or maybe reconsider your remote control system.
1. As far as I know, the pilot and front truck hangs down a lot when picked up. Model trains designed for average track have a lot of up and down travel built in to keep the drivers and pilot and trailing trucks on the rails. An Aristo steamer will have the front pilot truck drop 2 inches. I don't think there is anything wrong with your loco.
2. That said, the longer, more complex loco will need better track, so you should look for "vertical" curves, like humps or dips and smooth them out. MTH trains are designed in a manner similar to LGB though, they can handle sharper curves and poorer trackwork in general.
3. You can run on AC or DC, but I would recommend DC, and a well filtered DC supply. Personally I believe that an inexpensive switched and regulated power supply will work just fine, but there are experts that claim you need an analog filtered DC supply like a Bridgewerks. In any case an "ordinary" DC "power pack" will not work well, the MTH system has a weakness in that the "signal" "rides" on top of the track power. The "strength" of the signal (in volts) is much less than the track power, so it is sensitive to interference, or "noisy" power.
Check out Raymond Manley's web site (google him) for some of the best tips on the web. Also John Allman is a great resource. You might have to google their names and restrict the search to mylargescale.com...
Regards, Greg