1. on the target lookup; this needs to be an entity in dynamics?
Yes. This is a target object to get the value from.
2. on the results column what am I expected to put here?
This is a column from the Lookup Object (the above one) from which we get the result value that will be assigned to the mapped target column.
For example: you want to delete some records from your 'merchantaccount' entity, you have 'ce_seller' column in CSV file and corresponding 'ce_seller_Dynamics' column in your 'merchantaccount' entity. Lookup will look like this:
Lookup Object: merchantaccount
Result Column: merchantaccount_id
Lookup Key Column: ce_seller
This lookup will try to find record in the 'merchantaccount' entity and return its Id where column 'ce_seller' equals 'ce_seller_Dynamics'. If record is found Skyvia will delete record with the corresponding Id from the 'merchantaccount' entity. If record is not found, you will get the "No record found..." error.
The "invalid data type" error means that Lookup Key Column and CSV column have different data types, e.g. string and number. Currently, there is no way to use Expression mapping in Lookup and it is impossible to convert data types. You can either try changing CSV column data type at first step of Task Editor ( http://prntscr.com/mbz8bq ) or use another set of columns (with compatible data types).