--Seedings within each bracket are determined by the regular season records of the teams, so your #8 seed is - as you surmised - a reflection of the relatively pedestrian 86-76 record. I do not know the bracket assignments are done (i.e. which group of 8 you get slotted into). I assume that is random.
-- 1 game per day. I think it's just to prolong the experience and increase the tension of each game.
-- You can change your SP for the very first game of the TOC right up until the time the game is simmed. Just like for the playoffs in a normal league. I believe for each round of the tournament you can do this - just like for each round of the playoffs in a normal league. All subsequent games in the round, your SP will be fixed.
-- First three rounds are best of 5. Last 2 are best of 7.
-- Fatigue is a nightmare. The SIM calculates fatigue as though you were (I think) 20 or so games into a full season, and every player had used a prorated amount of their total PA (for position players) and pitches thrown (for pitchers) in those first 20 games. The upshot is you will see almost everyone in your starting lineup show fatigue immediately. Same with your pitchers. You cannot easily get away with running a 2-3 man rotation, like you can in the postseason of a normal league. Prepare to use your entire roster.
-- IF you win your series in fewer games than your next opponent, you will get an extra day or two of rest for your players. I.E. if you sweep round 1 and your round 2 opponent won his series 3-2, your players will look like they had 2 days of rest compared to his when round 2 starts.
-- A common question is "why am I in a 100M TOC when my team came from an 80M OL" or some variation. SLB calculates the total salary of your 25 man roster, including the actual salary of any SIM-generated AAA players. It then rounds UP to the nearest 10M. So if your total 25-man salary is $91.2M, you will be in a 100M TOC.
-- Do not necessarily be daunted by being a #8 seed...many of the #1 and #2 seeds, especially in the 80M, 90M, and 100M TOCs will have come from progressives, where they often put up gaudy W-L records, but compared to teams from Open Leagues or many other kinds of themes, they will not be as good. It is VERY common for the 7 and 8 seeds to upset the 1 and 2 seeds in the early rounds.