Po' is un troncamento or apocope which just means that it is a shortened form of poco and the correct way to write it is with the apostrophe (without the accent, you're making a geographical reference!)
Duo usually accepts such minor mistakes, unless they change the meaning, just like in this case. As mukkapazza and jyseltz said, Po without an apostrophe is the name of a river, and I think that's a pretty big difference.
It means "of it". In Italian you have to use this particle, you cannot just say "Voglio un po'", you have to specify, like in "Voglio un po' di pane", or you can use "ne" if it has already been mentioned or it's clear what you mean (as when you are pointing at it)