Yes you can use Environment variables check out KB50998
Yes you have to added the trailing slash for it to be considered as directory otherwise it is considered a file. (Per page 49 of the Virus Scan 8.8 Product Guide)
If I remember correctly the "Exclude subfolders" means that all folders located in the directory will use the same scan settings as the parent directory specified.
So If I exclude Root_Folder from being scanned on read and I check "Exclude subfolders" then Root_Folder\SubFolder1 will be excluded from scanning on read as well.
I am not sure about putting in a folder with double quotes (") around a path that contains a space.