"also if u change the sights, the shot goes higher without moving the barrel
why is this?"
With linked gun sights, range adjustments are made incrementally to the gun, relative to the sight. On other, simpler sight designs (Russian mostly) it is the reticule (inside the sight itself), and not the gun, that is being moved when you make range adjustments.
In other words, with the more sophisticated linked gun sights (IS-2, T-34 85, Panther, Panzer III\IV, Tiger, etc.), you can first place the reticule on the target and then adjust for range. While, with some Russian sights (T-60, T-34 76, etc.), you have to adjust for range and then place the reticule on the target. It's perfectly realistic. This might be in the manual.
"It appears that if you do not use the options, the shell will strike a bit to the right from the aiming point besides just being off vertically."
This is called parallax. Since the optics on a tank are positioned laterally in relation to the main gun, in order to hit anything accurately at certain ranges, range adjustments need to compensate not only for the drop of the shell, but for the angular deviation (parallax) between the sight and the gun. This is automatically corrected for whenever you make correct range adjustments in game.