How does the river stuff work... Well, I don't quite know. For the global info it's fairly straight forward: it follows the course of the river from the source to the sink. The region stuff is odd, however, as it doesn't seem to deal with the flow, but rather with connections. I have to fiddle with it a fair bit to get it to do what I want. In some instances you can create a bend in a river by specifying e.g. the tiles to the east to go to the west and the one to the south to go to the north and then nothing on the tile they join.
Basically, I do it with trial and error. Try something (starting with something sensible), look what I got, change things until it joins up the way I want it to, move on to the next segment...
It's possible to create an island by getting the river to bifurcate (i.e. split) with one leg going straight ahead and one going south, east, north to join up again, and it's also possible to get it to go in a loop such that the entry and exit touch, leaving an island in the middle with only a single break in the edge (i.e. two regions, rather than three).
The world map river sink can be outside of the map, by the way, but not the source, so you could create a new river that starts in the world map of your intended embark and then flows off the edge, and then have the source being off at the other end of the local map with your embark flush up to the world edge. You don't HAVE to do it that way, of course, but you can.