Start at 8 FFB then work your way up to 10. That's how you learn to be smooth. LSD is preference buddy, you can try anything you want but stiffen the suspension because GT6 has a lot of body roll compared to GT5.
But, if you haven't drifted at all on the DFGT then start by doing races on some sports hard tyres. Put more gas on corner exit to feel the car slide out, that way the drifting comes naturally.
No, it doesn't speed up the response it only increases the intensity(torque). It gives greater feedback from the track to a more realistic feeling but also allows you to feel the traction in the tyres.