You don't need to grind on the rivet and yes, the trunnion is the part that is riveted in the receiver and holds the barrel. You do have to grind very close to the rivet, however.
1. I use a dremmel and one of the little round, brown stones that come with it. The burrs will work, but take way too long and are not as smooth of a finish.
2. It kinda depends on your definition of "too much". Don't go crazy on it and the less you take off the better as this is part of the strength of the receiver. You don't have to be anal about it either and worry about getting it exactly to the nit of a gnat's ass. Just a little sloppy(about a thousandth or so) is ok as all mags are not exact, but you don't want to grind it where the front of the mag flops around everywhere.
3. The Surefires or any other mag that fits now, are just plastic (or metal?) and don't know you have ground on anything. It will not be effected.
Most of this info comes in the instructions, so you will have it in front of you if you need it.
Keep the questions coming if you have them.