When switching from "View | Default Coloring" to "View | Branch Coloring", is this more understandable? Do you see some disadvantages compared to the "rainbow" Default Coloring?

Please right-click the line you want to stage. There you can find the requested options.

Next 8.1 preview build will color the merge commits gray and allows to configure this color.

You can set the commit message limit by adding and modifying the following line to smartgit.properties:

smartgit.log.commitMessage.shortLimit=100

"icons text in the toolbar are black" - that's what I meant with "the API does not allow to change all colors". Please also take a look at dialogs, e.g. the preferences - they look worse.

What is CL? Regarding squashing commit: select the commits to squash in the Journal and select Squash from the context menu, enter a message. IMHO, this can't be made simpler.