Formations: They surely matter. If you play with the wrong formation, you lose. That's the main thing of the game I think, however you can also lose when playing with a counter formation.
Red Arrows, Blue Arrows: I don't really know if they work. I never play with arrows.
Player Morale: I realized that when I have low morale my players decide to "kill" themselves, however that happens in full morale games too.
Player Condition: Probably makes sense, my players perform like idiots when they play with low condition.
Special abilities: I don't think they make any difference, my players without special abilities play awesome too, so...
Attacking, Hard Attacking, Defending, Hard Defending: In my opinion they work, atleast when I use them they actually change the way my team plays I think.
Long-, Short- and Mixed Passing: I rarely use that, but when I play attacking I use Short Passing, don't really know if it makes a difference.
Playing down on Left-, Right- and Both Flanks, playing through the middle: That's what I use the most, in my opinion that really matters, as example if I have an AML and an AMR I play on both flanks, otherwise my players are too stupid to attack.