If you look on the Welsh Plus Youtube site that we recommend in the discussion on 'pronunciation', this is all explained very well. If you cannot find the discussion quickly, just search the web for something like 'welsh plus pronunciation basics youtube'. There is a series of short videos there, and we suggest that you watch them all several times while you are following this Duo course.
The pronunciation of "U" varies between the north and the south. In the south (as you suggested) it is pronounced like "i" (ee), but in the north it is similar to the French "u".
With lip rounding.
Roughly: move your lips as if to say /u/ ("oo" in English, "w" in Welsh), then try to say /i/ ("ee" in English, "î" in Welsh) without moving your lips.
Fyi guys: North Walian u isn't the same as French "u"/German "ü".
As mizinamo says, French "u"/German "ü" is like a Welsh i/English "ee" with rounded lips: IPA [y].
But north Walian u is like Welsh i/English "ee" with the tongue drawn slightly further back: IPA [ɨ]. Rounding isn't necessary. It's not a sound in languages like French or German, but is found as Russian "ы" or Romanian "â" or "î". You can hear the differences between northern and southern u here.
In some northern dialects i and u sound very similar, in others very different, and some Southern Welsh-speakers have difficulty hearing the difference at all!
No, "Talu" is the base form and "Dalu" is the soft mutation which does not occur based on the subject. You will find "dalu" after forms like "Wnes i/Wnest ti etc" or after "Dy" and "Ei" masculine in forms like "Gest ti dy dalu?" (Were you paid?) and "Gafodd o ei dalu?" (Was he paid).