1. FEFLOW itself can describe the river as a boundary condition, e.g., a transfer condition. If full interaction between groundwater and surface water is needed, FEFLOW can be coupled to MIKE11 (see http://www.wasy.de/english/products/feflow/ifmmike11.html).
2. I would not use a discrete element for the river in FEFLOW. Discrete elements are automatically turned off above the groundwater table, which makes such an application difficult. If you need to run an integrated gw-sw system, you should use the coupling with MIKE 11 or a fully integrated system such as MIKE SHE.
3. Source/sink is a water source or sink in the discrete element. For roughness and cross sectional area, please see the corresponding white paper in the FEFLOW documentation. Transfer rate is used in case of a transfer boundary condition on the discrete element. Qp is the source/sink term that is calculated by the equation the formula editor, Q is the defined source/sink parameter for the discrete element. By default Qp=Q, therefore no specific equation is used for the source/sink calculation.