Hello
@Bramhini r ,
I would like to answer questions 1 and 3, as I can't recall anything about question 2 again( poor me...lol)!
Proof of Physical Presence has to do with confirmation that one has been living in Canada. They are the documents that can be used to validate the claim that you are actually living in (or domicile in) Canada. Few of such documents are your utility bills, paystubs, house rents receipts, CRA documents, etc.
Proof of Status, on the other hand, has to do with presenting evidences that you are still legally permited to stay in Canada. Usually, some would define it as the proof to show that you are not out of immigration status. Depending on the type of Temporary Resident Permit one received while coming to Canada, the documens could be a valid Study Permit, Work Permit or Proof of Maintained Status, previuosly known as Implied Status, in case one's permit document has expired.
Regarding Letter of Explanation, I think it depends on individual. If there is any need to expatiate on any information an applicant deemed insufficient, I think one might want to provide more clarity by writing a Letter of Explanation. If everything about the application suffices, there might not be the need.
I hope this helps.