1. In its most basic form, residence time is the volume of the vessel divided by the flow rate (vol divided by vol/time gives you time). For multiphase vessels, it's usually the volume occupied by each phase divided by the flow rate of that phase. Depending on the specific system, there can be other definitions.
2. Setting NLL is a whole discussion in itself. Low, normal and high levels can be set based on residence/storage requirements or control system requirements, it really depends on the system you are talking about. For say a reboiler steam condensate pot, you might size it for only 2 to 4 minutes between low and high level because you only need enough time for the control system to respond to changes and for level, that is relatively quick. If you have a vessel on the other hand that is feeding a distillation column, you are going to want to have more surge capacity because if there is a change in the process flow into that vessel, you don't want to quickly have to change flow rate to the column so the feed vessel is designed with the volume to catch that process changes and then slowly adjust the feed to the column.
3. This sounds like a question for a flare KO drum. API 520 (or it's API 521) has a chart for CD, it's an iterative calculation but I don't remember the exact details. A flare drum will likely have a NLL close to or equal the low liquid level because you want to have as much room to catch a slug of liquid as possible but that's a specific case.