Trying to understand defconf firewall

Some answers (hopefully):

Input means (in this context) that the destination is the device itself.
As opposed to forward that means that packet has a different destination and "passes through" the device.

If you prefer the check in #12 differentiates the traffic between what is destined to the router from what is destined to other addresses (hopefully reachable through the router).

This should also answer your question #5, input chain only applies to packets that have "dst-address=self" (destined to the router itself)

"self" means always the same "thing" the router itself, and it is used THREE times,:
5 from self (localhost)? <- try reading it as “Is src-address router's own?”
12 dst addr=self? <- try reading it as “Is dst-address router's own?”
24 dst addr=self? <- try reading it as “Is dst-address router's own?”

First thing you shouldn't, that is Rule #5:
The twelve Rules of Mikrotik Club

Post the actual log entries you see, but check also logs for firewall rule #1, maybe the DNS answers are in the latter.

Yes, because firewall rule #2 applies to chain INPUT only, whilst firewall rule #6 applies to chain FORWARD only.

There are mainly two schools of thought on Mikrotik forum about firewall rules, the rextendeders and the anavites, the former believe that the default firewall from Mikrotik is cleverly designed AS IS and should be NOT modified (if not to drill small holes in it to allow some specific service/connection), the latter believe that it is ALMOST fine but you need to replace the last rule with a "drop all else" one and EXPLICITLY ADD just before it what you actually want to allow.
The debate is essentially around how the default last rule is too clever and complex to understand, see these thread:
Ready to start my custom firewall rules journey
Review of PPPoE and Firewall rules for improvements
Firewall rules analysis

If you use the final "drop all else" rule in the forward chain, you essentially have your "Drop by default" setting, but anything that you don't explicitly allow before it won't pass through.

AND do check the firewall part in the excellent article by tangent here:
https://tangentsoft.com/mikrotik/wiki?name=Default%20Router%20Configuration