Hello,
1) While we trying to install bundled plugin we get the following error http://prntscr.com/qbgil7 That means that your server does not allow to create the directory and install plugin because of writing limited permissions. We can’t install not just bundled plugin but even default WordPress plugin https://gyazo.com/7bf3519d80ab64d4d4be31296093309a As a rule, it’s not a very big problem because plugin could be installed via FTP but we can’t connect to your FTP using credentials that you provided http://prntscr.com/qbgkdr
I don’t know why it works for you and does not work for us. Maybe you provided the incorrect password or maybe your hosting has any other limits.
So, either contact your hosting provider and ask to fix the folder permissions to allow you to install plugin via WP Dashboard or install plugin via FTP if you can connect to your FTP without any issues. Download plugin here https://www.8theme.com/downloads/ extract plugin archive and copy extracted folder to wp-content/plugins on your server. Activate plugin from Dashboard after that.
2) You can create product categories and subcategories in Products > Categories. Choose the parent category for your subcategory while creating or editing.
Regards