Nice, glad it worked out. The only time you dont use encryption would be large rooms (>100 users) because eventually joining the room will slow down a lot for new people due to all the key sync stuff. So i would turn it on in your case.

Unencrypted messages/media/rooms can be read by the server administrators of all the servers that have one of their users in your room. matrix.org and other big servers have implemented server side scanning for unencrypted rooms, so if you dont like that turn it on.

As long as everyone verifies their own devices there shouldnt be any need to think about encryption key stuff. Server side key storage using the recovery key makes the key sync process between your own sessions much more reliable in my experience however.

You can also verify other peoples identity (is this session im talking to really used by person X?) in person by scanning a QR code on their device but thats not functionally necessary.