The extra pound of sugar definitely explains your high gravity. OG is original gravity. Basically is a measurement of sugar you have in your wort. You can take your original gravity and use that to determine alcohol content when the beer is done fermenting. There are calculators online to help with that.
With such a high OG, your yeast may have a hard time consuming all that sugar and converting to alcohol. Also you need to be able to pitch enough health yeast, control your fermentation temperature. If you are using liquid yeast, probably should have made a starter, with dry yeast, I would pitch a few rehydrated packages.
what's weird is that according to those instructions, an extra pound of sugar shouldn't be raising it to 1.100 from 1.070. BUT i typed the recipe from the top into beersmith, and without him adding an extra pound of sugar, just following the recipe that already has the 1 pound of corn sugar, it should've been 1.084 OG! how could the recipe be so far off? another reason i don't like kits. in order for that recipe to be 1.072 it would need to be 5.8 gallons.
then if you throw in another pound of sugar on top of that, you end up with about 1.093 OG! add onto that the likelihood of not mixing the water and wort really, really well, and that explains your reading of 1.1 (really probably even higher. with all that foam it's hard to see exactly where it is).
what type of yeast did the kit come with? with a 1.093 OG you need about 2 packets of dry yeast (depending on how old the packets are). make sure you really have control over the fermentation temps, you don't want this one getting warm on you. about 60-63F ambient temps is what i would suggest. if you can use a swamp cooler type of method, even better, and then you could go for about 65F in the cooler.
as far as the dry hopping, there are many opinions on here about it. with your beer being so big, if you don't have any brews coming up anytime soon, you could leave it in primary for like 4 weeks, then dry hop, then bottle. if you do plan on brewing something soon, rack it to secondary after like 2 weeks in primary. then let it sit in there for 2 weeks, then dry hop, then bottle. with either method, i would just throw the hops in there without a bag. let them sit for 5-7 days.