the pattern that you see with the residuals is related to how to choose to display them. In the Residuals Monitors dialog box, you can increase (or decrease) the number of iterations to plot or store. As your simulation progresses, Fluent may display less points from the earlier stages of the simulation to meet the number of Iterations to Plot, as defined. This does not in anyway impact your solution!
Regarding your second question, relative size of residuals is not as important as the trend of those residuals. If you see your continuity residuals decrease from iteration to iteration (for example, the behaviour of continuity follows the same patterns as your xyz velocities in your screenshot), this suggests that continuity equation is probably converging as well. You may check mass balance at the end of your simulation to double check that your results physically make sense.
I hope this helps.