Answer:
1. Paola quiere una revista de ciclismo (Paola wants a cycling magazine)
2. Porque Miguel no entendió a la primera (Because Miguel didnt understand at first)
3. No, pero le dice donde conseguirlas (No, but he told her where to get it)
4. En la tienda de deportes (at sports shop)
Answer:
I would go with the second image. it's an informal dialogue.
Habia because Habia means there were. On the other hand we have contaba which men tell, saludaba which mean said hi, and nacia which means born. so your best bet is Habia
great great grand daughter