The current help text attempts to explain point 2, in terms of an active virtual environment, shebangs, the PY_PYTHON[2|3] environment variables, and the py.ini [defaults]. It's a lot to say succinctly in a few lines of text. A shortened URL that links to the docs would be helpful.

The -0[p] listing uses an asterisk to highlight the version that `py` runs without a version specified in the command line or if a script has no shebang.

For point 3, referencing CSIDL_LOCAL_APPDATA in the documentation is not useful for people who aren't familiar with the Windows shell API. The help text from py.exe uses "%LOCALAPPDATA%\py.ini", which is more useful at the command line. It also explains how to locate py.ini in the launcher directory by using `where py`. However, a lot of people use PowerShell nowadays, in which case it has to be `where.exe py` or `gcm py | select source`.