Hi Fran!
I'm sorry we couldn't do much more for your theme. If you do decide to change theme or go the Custom Design route, let me know and I'll gladly help you along!
Ok, let's take your questions one at a time:
1) getting rid of the "TRAVEL category:
The reason you can't delete it is that it is set as the Default Category here:
https://franstravels.wordpress.com/wp-admin/options-writing.php
Pick a different category as default, and then you'll be able to delete that one. Trust me, I still remember struggling with that one way back when, so you're not the first to face this issue! :)
2) "Humor" category:
If you look here:
https://franstravels.wordpress.com/wp-admin/edit-tags.php?taxonomy=category
you can see that "Humor" has 0 articles.
The reason that those articles appear in your menu is that you manually placed them there.
If you look at your two articles that are in your menu, you'll notice that they are in fact in other categories, not Humor:
http://franstravels.wordpress.com/2011/10/31/george-washington-ate-here/ is in "Travel Pieces"
http://franstravels.wordpress.com/2011/10/30/sneeze-souffle/ is in "Lifestyle/Fun Stuff".
So if you want them to appear on the "Humor" archive page, you'll have to change their categories.
3) collapse posts on the menu page:
I can see how that's annoying, to have them that long and have to keep dragging up, but there's no way at present to collapse the submenus on the menu edit screen. That's a good idea, though, so I'll see about making the suggestion!
I hope these helped! Let me know if you come up with any more questions. :)