<<< What is the difference between 64 and 128 bit? >>>
128-bit is a higher level of encryption, more secure and harder to crack. For more detailed info click here
<<< Can I dream up any hex string of the required length, then just enter it on the PC and Laptop? >>>
<<< I did read (in my searches on this forum to a link) that a 26 character hex string needs the prefix 0x. Is this correct and if so does a 10 character string need a prefix >>>
I haven't heard of that one and, if I get my router to create a 128-bit 26 character hex string it doesn't start with 0x (not that 'x' is a valid hex character).
I would suggest you try the available options and see how you get on. You are not going to damage anything by playing with encryption settings.