IM 1.6 is being phased out as 1.7 nears completion
The emulated 360 controller is showing up as controller 2 in XInput
This is caused by extra ghosts of hardware that no longer exists lingering around. Use your device manager to remove all instances of 360 controllers then restart. Can also be caused by Nvidia's Shadow Play, this will need to be disabled.
An input protocol developed by microsoft in the mid 90's designed to attempt to standardise communication between input devices and games. Direct input has been mostly replaced by XInput for most gaming devices, but Direct input remains fully supported by Microsoft due to the fact that complex devices such as flight sticks and wheels require it due to the more complex and higher number of inputs.