The theme setting UI is common to core Discourse, so I can’t do anything to improve that setting in the component itself. It’s definitely something I’d like to see become a little more intuitive, or perhaps even have the ability to dynamically populate a searchable list at some point.
As for the local changes notice, I don’t think it should be warning you unless you have modified something using the Edit CSS/HTML button. Are you on an older version of Discourse? I believe that behavior should have been fixed in FIX: copy local theme changes to correct temp folder when diffing upd… · discourse/discourse@5cf5e73 · GitHub (cc @pmusaraj)