The password require tick boxes shouldn't be touched (don't know what the implications are) and should be left at the default of unticked. Same for use automatically, that defaults to ticked. In fact the only change you should make are the usernames and passwords, as I detailed above. Probably doesn't make any difference, but certainly they do not need to be changed to make this work from what I can tell.
I haven't a clue what the cifsxxxxx 0 byte files are, I have never seen anything like that before.
I'm thinking we are chasing our tails a bit because something seems to be quite wrong in your set up. Typically, this is extremely easy to set up, it detects, you tell it LMCE structure, it creates the folders, you put media it, it scans it, you play it.... simple. I'm thinking something somewhere along the path has gotten in knots or corrupted. We could continue troubleshooting (indefinitely!) but the simpler path may be just to reinstall your core from scratch. Now it sounds like your NAS is set up and configured ok, and you know to use LMCE folder structure when asked, and to add the username/password once added, it should be very straight forward to get working.
While you are at it... is there any reason why you need 2 shares on the NAS, such as some kind of partition size limit? If not, combine them into one share and head off that potential issue at the pass! I believe that with a single share, the issue of shares not remounting properly does not occur... certainly I have never seen it in my installation, so until that bug is addressed, the path of least resistance is to stick to 1 share.
