Do I still need to enable the Password Options settings in the DirSyncPro profile below when using the Password Propagation Service?

You do not need to configure those password checkboxes in the sync profile config. Those are for the legacy password synchronization method to copy the password hashes. Keep them unchecked if you are using Password Propagation Service or else DirSync will copy hashes that will not work since RC4 is disabled in the target.