If the network is working correctly, I don't think that you need to be so sensitive... It is normal that Wi-Fi lights are flashing...

Check details here. http://www.tp-link.us/support/rma/

Ping 192.168.0.1 from the client connected to 192.168.0.2 works, right? Normally, if you can ping it successfully, you should be able to access it. Check anti-virus software and firewall settings on...

Update: I consulted TP-LINK support team on this issue. They said there is no DHCP option 61 which can be modified manually on web interface of D7 and it should not be able to work with Sky fibre...

How did you configure more than one SSID? Can you provide related screenshots? If we enable guest network, we will be able to set the guest SSID. It seems that you are talking about different things.

Maybe there is a compatibility issue between your modem and MR3420. MR3420 V1 support 4-address MAC Address format. When it works in WDS mode, it requires that the main router also supports 4-address...