1. is there a rule of thumb for incidence angles and down thrust.
Not really. Incidence is relative to the specific airfoil and airfoils differ greatly. Down thrust is a trim function that is used for many different reasons and none can be boiled down into just a single reason.
2. Is my approach of developing the angles and working on the relationships vs worrying about the datum line the right approach.
The angles like the incidence angle require that you know the centerline of the fuselage (datum line) so those aren't two different approaches. Do you need to work on the angles? Maybe. But it'd be the angle of the wing relative to the ground you need to sort out.
3. The wing is flat bottomed, but only from about 1/3 the way back. If I draw a line from the trailing edge to the leading edge, the leading edge is 3/4" higher than the extended flat bottom. I expect I have a semi symetrical airfoil vs the flat bottom trainer wing. Am I correct in using the cord line as my reference for wing incidence vs using the flat bottom ?
The centerline of an airfoil is found by doing a couple of things. Find the smallest radius circle that will match up to the forward outline of the wing's leading edge. Do the same thing for the trailing edge. Draw a line between the centers of those two circles and you have the centerline of the airfoil. That is the line used to layout the angle of incidence. Designers do not consider the flat bottom portion of a wing for much of anything.