1. In my case, the first natural frequency is at 11 hz. However, that is not of important to me. Should I still chose 1/(20*11) as my time step? Or should I use 26 hz, which is close to my forcing frequency? I actually ran the case with 1.667E-3, and I noticed a huge difference (see attached). In fact, I tried other time steps and results changed significantly. 

2 & 3 - I spent all my sunday reading about damping. I am still lost, with so many resources out there and mixed answers between Structural and material damping. I also went through ANSYS damping pdf. 

Is there any article you can suggest, that talks basics about damping, and directly related to terminology of ANSYS? I see you mentioned they are additive, but how are they different though? how is analysis damping different from material damping?

There is an option for damping in Modal analysis and also in Transient structural. Should I write damping values in both locations?