Ah, your tool is in inches but your project is in metric. Right now there's no intermixing of metric/imperial tools/projects.. It thinks your tool is 0.125mm in diameter. The same goes for your operation parameters - it looks like you have them all in inches but your project is metric.. When you change between inches/metric mode it changes everything in the program to one of the other, not just the project's dimensions.

Great! Let us know if you need help with anything else.

You can set your machine origin relative to your project as percentages of your project's size. If you want your machine zero to be at the front-left edge of your project you'd use an X offset of 0% and a Y offset of 0%. The default is the center of a project, or X=50% and Y=50%, with the top of the project as the Z0. (Z offset = 100%). The red-green-blue axis lines you see in the 3D view are the machine origin (XYZ = 0,0,0) and change after adjusting the origin offset values and hitting Apply.

If you change your project size and/or machine origin after creating some operations you will have to go back and re-generate their toolpaths by hitting the Apply button on each one to get new toolpaths which are set to the project's new size/origin. This is something that's been on the table for re-working to make it easier for users to change without having to regenerate toolpaths manually.