Well since the screenshot is fine but it's not to you, chances are it's a monitor issue. Could be you need to "refresh" the monitor (occasionally mine gets fuzzy after a resolution change, but by cycling the inputs back to DVI it resets the monitor). Possibly you need to update your monitor drivers. Could be the VGA or DVI cable. Could be an option in CCC that I'm not thinking of right now (I'd definitely go through them if I were you)
Um... that's a bit odd... I doubt the monitor is actually capable of displaying over 60Hz so it's wierd that selecting the higher one would fix it. No it won't cause any damage, it shouldn't do anything.