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Hey, no worries, there are no stupid questions :)

cli_wallet is a command line tool for working with the blockchain and accessing account information. It is included here: https://github.com/steemit/steem
There is also a post explaining how to make it work for windows, this is here: https://steemit.com/steem/@tuck-fheman/how-to-mine-steem-in-windows

A trusted host is a system with steemd running by a person that you trust. With that I mean, the database (the blockchain) is running on a peer2peer network and a malicious peer could read your password and steal your account.
When you have a node running on your local machine would be trustworthy...for you at least ;)

Hope I could help you.

Thanks man, I will look into it. I still have so many questions about steemit especially with the wallet. I dont understand how the wallet works and how to make it work. How to check my earnings? How the payout goes, is it automatic or I need to generate it by myself?