I don't have a Palma, but I have a Book Go 6, which looks like it has similar display tech. So I think I can answer some of your questions.
The backlight can go all the way off, to the point where it is invisible in a dark room. You can also adjust the backlight color temperature.
Typing is bad, but I've never spent time optimizing it. I would guess that the responsiveness on the Palma might be higher. I also never tried it in high-speed mode, which is much more responsive but has worse ghosting and generally worse image quality. For my use case (99% just reading) I don't mind the slow response time.
It's possible to access the normal Android settings, though I just picked up my Boox Go and I can't actually figure out how. I know I've done it before somehow. The Boox settings app has a VPN section, but I don't see DNS options. Pretty sure you can do this though.
One thing I want to point out is that the Palma is not technically a phone. It's a wi-fi device, so it will not make calls or send SMS. You would be limited to internet-based messaging apps like Signal or Telegram. I can't speak to how smoothly those run.
There are also a couple proper phones (with SIM cards) with similar display tech coming out this year. See:
https://www.theverge.com/2025/1/6/24335983/tcl-60-xe-nxtpaper-e-ink-specs-ces
https://liliputing.com/the-minimal-phone-is-now-shipping-e-ink-phone-with-a-qwerty-keyboard/
Snapchat does not use end-to-end encryption for messages, so it doesn't even belong in the conversation.
WhatsApp and FB Messenger are somewhat defensible choices since they at least use E2EE by default (Messenger did not until recently). However, there are a few good reasons to favor Signal: