user and host names are required only if you are trying to connect to a qemu instance on a remote machine over SSH, so shortly just click on Connect.
IMO yes. IT is a front-end for qemu and other hypervisor or container software running on linux like system. Because qemu has lots of options and setting them every time at launch time is not really easy, a simplified gui a virt-manager helps a lot.
Waha is different from other software like VBox is virt-manager is just a gui so it let you choose what hypervisoy/containes software you really want to use. So at first open it ask you to select which software you want to use and this is what it calls connection. If you installed qemu-kvm on your pc all you need is to connect virt-manager to QEMU with the window you’re already opened by clicking on Connect. Of course you may use more than one hypervisor/container software form the ones it supports (eg qemu, LXC, Xen) and the first time you have to Connect them.
Once you connected QEMU you can add VM under it so virt-manager may know you want to virtualize a box using qemu by opening the menu (right clink on QEMU row) and selecting New.
The VM creation is similar to other software. It usually put VM files and ISOs in /var/lib/libvirt/ path. This may be changed (eg. sometime I prefer to put them under my home) but you need to pay attention to perms of the folder.
Also your user should be member of a group named libvit (or libvirt-qemu, i don’t remember this now).
Another thing you need to know you can’t select file from the disk directly but you need to create pool before. This just mean you have to say to virt-manager what folders it may have access.