Yamaha XS 250 power amplifier

1. What should I set the rear, amplifier volume knobs on

You can set it to maximum
OR
Turn it to minimum and turn your preamp volume to maximum, play some music or test tone, slowly turn up the amplifier volume knob to the highest level you still feel comfortable with and set it there, so if someone turn the preamp volume to maximum it will not harm anything.

2. Can I disconnect the internal fan

Not advisable, the amp might go into protection mode easily.

3. Can I safely attach two sets of speakers?

Yes, as long as you don’t turn the volume too high and let the amp protection kick in.