1)What exactly does reserve mean?
The forth pin you see on the motherboard fan connector (
) is for 'Pulse Width Modulation', or PWM for short. It is for the motherboard to control the speed of the fan by sending various voltages and is adjustable through software means (such as BIOS or desktop software). With the classic 3 pin fan connector, you cannot control the speed of case fan manually through software. You must use a PWM compatible 4-pin case fan or CPU fan in order to take full advantage of it.
2)Should I plug my 2 case fans into sysfan 1 and 2?
Yes you can plug any case fan into any connector on the motherboard. PWM is not very important or useful if you're only gonna plug a case fan onto it.
3)and what do I do with pwrfan? From what I've read I should just leave it alone?
You can still plug a case fan to it. Some power supply fans have an extra case fan connector for you to plug onto the motherboard so you can monitor the RPM. Many power supplies don't have this option, so that means you can pretty much plug any case fan onto the pwrfan as wel.
4) Should I just power the front and rear case fans from the PSU?
I would take advantage of the fan connectors on the motherboard instead of using molex (
) on the power supply. When you plug your case fans onto the motherboard, you get to see the RPMs each case fans spin at. With the molex connection you cannot monitor the RPM.
Edit:Also I'm going to opt for the arctic cooler 64 freezer pro for my cpu because I am going to OC a little. It comes with pre-applied MX-1, so, I won't need to apply any thermal grease to the CPU right?
Most likely you won't need to apply any other thermal paste if your CPU fan already comes with some sort of thermal pad.