What settings for local TrueNAS as backup destination?

I think you need to enable the service. I would suggest SFTP:

That is a bit confusing for two reasons:

  1. Usually, one mounts an SMB share in Windows, and then configure Duplicati (or any application) to use the drive that it was mounted on (e.g., X:\)
  2. Native support for SMB is not in the current stable, you need an experimental release

For (1) Duplicati does not realize that is is an SMB share, it just sees a local filesystem and makes backup to that.
For (2), the advantage is that you do not need to pre-mount it, so you can keep your backup settings out of your Explorer view and inaccessible to other applications that should not use it anyway.

That depends on your security mindset I think. I would argue that any of the tree suggestions can be secured and would fit a home-use network. I would personally go for SFTP as the use of keys instead of passwords greatly increases security, but you need SFTP without the option for a shell.

I don’t think there is a general way, as each user has different requirements.

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