I put a Spanish billing address but used my regular PayPal account (Belgian) and it did not report any error. About the password, I guess it automatically creates an account with the specified password. I did not create any user, I only filled the required fields.
What does it mean with Servicio extendido de descargas? Google translates it to "Extended Service downloads", but I have no idea what they mean with that. It will cost me 4€ though, and I don't see any way to remove it.
They host your download of the game for a limited time, if you pay the service they'll extend the time to 2 years. Since this game is a Steamworks title there is no need to download it from them at all so you should remove it from the cart before paying. There is a trash basket icon to the left of that line, click it and it will be removed.
It's a Steam game, so this is a scam.
They do host the game files if you wish to download it from them. If it's anything like other stores it will be a regular installer that will ask for your CD key and Steam account at the end but it is completely unnecessary and you can remove it.