You can remove the validation or alter it so that the number is not required, removing it might be the easiest way to get past this issue. At the top of your orders update page look for this line of code:
$WAFV_Errors .= WAValidatePN(((isset($_POST["OrderPhone"]))?$_POST["OrderPhone"]:"") . "",true,false,true,8);
You can safely remove it to stop the validation from occurring on the number. This should allow you to send the order confirmation. This should not have any effect on a test transaction though, the order must be placed and recorded before you will be able to send any confirmation.
As for changing zip to postal code you can change any of the labels that you see on the pages to say postal code instead, this will not have an effect on anything. The same goes for the states, it is just a static list that you can update to include areas or whatever else would make sense to put in there.
Thanks for your reply Eric, I've managed to send a shipped confirmation now. However, Im still seeing no transfer exchange of money in Paypal sandbox testing? Also, how do I make the site SSL secure, when entering card details? It is supposed to be Web Payments Pro.