It has always been safe to overclock the Switch, Lite or otherwise. Whether or not its worth depends on you because unlike the normal Switch, the Lite can only be played in handheld mode which uses the battery. Overclocking will reduce the long term battery life so you personally have to weigh if the reduction in battery life is worth the extra stability and/or frame rate. As for overclock settings, that depends on the game(s).
Well if it was dropped and you're experiencing issues, then its most likely a hardware issue no? If you drop your computer on the floor and it starts showing the blue screen of death, that means you either need to repair it or get a new one. Same logic applies here.
If you are in Atmosphere with Hekate as your bootloader, you can use the in-system function of Restart to go back into Hekate. As for the safest firmware, the latest firmware is fine since its been several months since its release so all relevant homebrew have been updated already to support it. Plus in order to play the latest games, you need to be on higher firmware versions anyway so there's not much point in delaying the upgrade. I would however never ever use an AIO tool; they are always notoriously buggy and cause more issues than they fix. Stick to Daybreak.
