I've not had any issue logging into any instance with Jerboa. You literally just put the instance in and your login details. Sometimes I've had to use my email rather than username, but I think that's more due to case sensitivity.
Everytime you would try to log in to the Jerboa app, you will get this error and the app would not net you sign in. It may look like you have signed in but if you reopen the app, you would see that there aren't any account signed into the app.
Nah I dunno, maybe because I'd already signed in before the upgrade today I've not had the issue.
Others have said that it does sign you in even in spite of this. However if not, I guess you're SOL until v0.18 becomes adpoted. Even then, I know lemm.ee isn't going to be updating because of the lack of captcha, and I wouldn't be surprised if others are holding off also. In which case it might not be until 0.18.1 comes along.