Yes, you can do the dilution and the way you do it is to take some pool water and dilute it with an equal part of tap water (or filtered or distilled, but tap is fine since it does not have CYA and shouldn't be cloudy). Then, do the CYA test as normal, but use the diluted pool water instead and multiply the result by 2 when you are done. If you think the value is even higher, then dilute the pool water more at the start -- say one part pool water to two parts tap water -- then multiply by 3 at the end.
In all the cases above you still use the same amount of CYA reagent (usually 7 ml unless you have the Taylor test that goes down to 20 ppm which used 14 ml) and an equal amount of the diluted pool water.
Yes, target the FC at 11.5% of the CYA level and just make sure it never gets below 7.5% of the CYA level. Ben's chart was based at least partly if not mostly on experience so for simplicity and due to the roughness of the experiential data, it's done in ranges. You can see from this chart that Ben's "Min" column reasonably tracks 0.03 ppm disinfecting chlorine (hypochlorous acid) while the "Max" column reasonably tracks 0.07 ppm though not as well. The Shock column is not very consistent.
At the low CYA levels, Ben accounts for the fact that no one can consistently maintain very low FC levels, especially in manually dosed pools, and that localized consumption of chlorine requires a minimum FC regardless of CYA level. As for the Shock column, any high level of chlorine will clear a pool of algae so it really comes down to how quickly. You need enough chlorine to kill the algae faster than it reproduces, but technically the Min column should do that. The problem is that there is SO MUCH algae in a bloom that it consumes nearly all the chlorine very quickly and that algae that is deeper in a biofilm doesn't get killed. So higher chlorine levels ensure you don't run out locally and also kill the algae faster so you get deeper into the biofilm. It's not an exact science for this, but I prefer to set a single disinfecting chlorine level of 0.3 and then just require, even at lower CYA levels, a certain minimum amount of chlorine so one does not run out.