"revoc_reg" is a revocation registry. In general, issuers need to be configured so that they are prepared to revoke claims that they issue (in case they issued them with an error, or the privilege associated with the claim should be suspended or lost). The revocation registry tells the world how the issuer will publish revocation info; this is used by provers to prove to relying parties that the claim they present is still valid (instead of having been valid only at the time of issuance). Anybody can issue claims, but I think revocation may be most interesting to public institutions; private individuals who issue claims (e.g., "I'm asserting that my friend Fred is a good surfer") may not care about this.
sovrin_issuer_create_and_store_keys is about creating the keys that will be used as an issuer of claims; create_and_store_[my|their]_did is about allocating a new pairwise identity.
I haven't studied the usage of sovrin_wallet_set_seq_no_for_value uses in the example; I'll see if I can look at that later.
The preferred term for "link invitation" is now "connection request." In general, we have a bunch of things that either party in a pairwise relationship can offer, request, and provide. We decided to standardize on those verbs, so we have "claim offer", "claim request", and "claim"; also "proof offer", "proof request", and "proof". The analog for connections is "connection offer", "connection request", and "connection". However, "connection offer" doesn't make a lot of sense; it would be sort of like someone sending you an email that says, "Hey, would you like me to connect with you? If so, I will send you an email so you have my return address." Instead, we just go straight to "connection request", which is like sending an email that says, "Hey, I'd like to connect with you. Here's my return email address so you can accept the request if you like."
The python versions of wallet and client are eventually going to be replaced by libsovrin, for reasons of consistency. However, that changeover will not be immediate; we only began writing the python wrapper for libsovrin a couple days ago. When we do complete the replacement, we hope the python code that calls today's python wallet will have only slight tweaks to call a different interface, but will otherwise remain stable.