Yes, I think Cassie is correct on the abbreviations. I never remember what they all mean beyond the ages either, but when I see a bunch of service or role sims with the same ones there is an easy to spot pattern.

What is supposed to happen is that you get an on-screen message that your choice is happy your sim selected them and is waiting for a call or an offer to go out on a group outing/date that your sim needs to initiate. Or, I suppose, they think your sim is disgusting and wishes that they would not bother (I've never seen this, though). I believe that you should be granted a friendly relationship head start with the chosen sim, or at least something that makes them more amenable to chatting by phone and getting together than would be the case with a total stranger. That could all be in my imagination, but it seems to work out that way.

Service Sims are always homeless. If you make one a resident, then they aren't Service Sims anymore and the game will generate replacements as needed. It's Role Sims who can be either.

Nothing to do with Matchmaking, but did you miss the story I'm working through where I've created a Halfway House for former homeless sims to give them a chance, whether they take advantage of it or not, to learn some skills, contribute to the household, and become more functional and personally fulfilled/happy members of society? It's become loads of fun, but of course the game generates more Service Sim replacements especially when babysitters are insisted upon for inactives with toddlers/babies than anyone could possibly keep up with. Thus entry into this new system of mine is currently by (my) invitation only to help avoid sim overload, not enough beds, etc.