#1. The only way I found to turn off the annoying light behaviour post- Kitkat update is to turn off the lights completely.
#2. I couldn't find a way to revert back to the previous handwrite input. Try Stylus Beta app, it is similar to the Kitkat version but works better.
The Kitkat update on the Note 8 is so screwy that I convinced the store I purchased it from to exchange it for me for one that is still on 4.1.2, almost a year after I bought it. First thing I did with the new one was to disable the update service.