1. They use the term "open source" because it is the more popular and
accepted term for the type of software with most developers. Thankfully their
license list contains licenses classified as "free software" as well except
for the "No License" option. They probably included it to answer questions on
what happens when you omit a license.
2. The GPL v2 is still important and they probably list first due to the
popularity of projects like the Linux kernel using it. If they did NOT have
v3 on the list, then it would be an issue.
3. On the OSI page and through usage over the years, the "MIT License" has
been pretty defined in what it is. The majority of projects under this
license follow Expat. If it was me, I would prefer to go with a 2 or 3 clause
BSD if Apache 2.0 wasn't an option.