Sure. (manual) means that the feed is not updated unless you do a manual update. This can be done ether by pressing the “Regenerate” option in the Feed List, or by pressing the “Save & Generate Feed” button on the “Product Feed” page.
With (auto) selected, you still can perform manual updates, but in that case the “Update Schedule” is also active, allowing automatic updates at the given time schedules (separate for each feed).
As for excluding specific products, that is only possible in any of the Pro versions. You could use the build in wppfm_feed_item_value filter (also available in the free version), but that requires some PHP programming knowledge. If you know a bit about programming, you can find more information about the wppfm_feed_item_value filter here: https://gist.github.com/Auke1810/c62bb043926f539f9a99b418c06a3e6e