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Currently Textastic supports codepage 855 "Cyrillic (DOS)" if you do a long press on the file name and choose "Open with Encoding". I'll add codepage 866 "Russian (DOS)". Thanks!
You need to do a single tap on the editor once, so that it has focus. Only then can you use the external keyboard cursor keys to modify the selection or use the delete key to delete the contents.

If you are using the default settings, the row of additional keys comes up when it has focus.
It's a common mistake to include more than just the host name or ip address, so that's why I mentioned it. It's easy to add a trailing slash when you are copying it from an URL for example, so that happens quite often. No offense meant.
Regarding WebDAV: you can upload files using WebDAV to your webserver. In the preview screen of Textastic you can switch to "Remote" and enter a remote URL that is served by your webserver. Textastic itself does not run PHP code locally.
Can you send me a screenshot of your FTP connection settings? Make sure that you only put the IP address in the "Host" field - do no't include "ftp://" or a trailing slash.

You can find detailed information in the manual at http://www.textasticapp.com/v5/manual/lessons/How_do_I_connect_to_an_FTP__FTPS_or_SFTP_server.html
Thank you very much! I really appreciate it.
How exactly do you try to bring up the keyboard? Please make sure that you are doing just a single tap, not a double-tap and not a long press gesture.