The error you are getting is because you created the shipping calculation as:
[Shipping] * [Quanity]
[Shipping] * [Quantity]
to charge a flat rate for each item, you need to add a new column in your cart object for the shipping price. You will also need to have this column added to the products table.
In the add to cart button behavior, bind the new Shipping cart column to the shipping column in the recordset.
Now in the eCart object, set the calculation of the shipping rule to be:
Based on Column Subtotal:
subtotal Of column "TotalShipping" "plus" "0"
The business address for paypal is on the confirm page. Look for a hidden form element named business.