You must activate outputs in mame by setting the variable "outputs" to "windows" (it is set to "auto" by default).
Then I would start by testing your peripheral with mamehooker "test" submenu. Thsre's no need for a running game for this test, so you avoid a possible source of issues.
To answer to your first question: when mamehooker "hooks" the running game a file called "romname.ini" will be autogenerated in mamehooker's "ini" folder.
Follow word-by-word Howard instructions, starting from the first tutorial to the last
