Welcome to OCDO. There are a LOT of very knowledgeable folks here, and I'm surprised this question hasn't been addressed already. So I'll take a shot at it.
A "paddle holster" refers to the way a holster attaches to your belt. Some holsters have slots that you feed your belt through, like a Galco FLETCH, or the ubiquitous Bianchi 19L. The popular Serpa holsters also come with belt loop mounts, but also come with paddle mounts.
The advantage to a paddle mount is that it is easier to put on and take off your belt. It slips over your belt and waistband, and is held in place by a system of spring tension and hooks.
I prefer paddle holsters. I think they are more comfortable (I can move them around on my belt and their location is not restricted by where my belt loops on my pants are located) and they are easier to adjust when I'm in my car.
Also, if I need to take my firearm off and store it in my car (like to visit a government office, school, or a restaurant that serves alcohol--I live in NC) I can take the whole rig (pistol and holster) off quickly and discretely while sitting in my car, without having to undo my belt. And when I am done, I can put it all back on quickly and simply.
Some people prefer slotted holsters, claiming they are more secure. I don't really see that to be the case. The paddle holsters I own (Serpa, Bianchi, Galco) all have very positive spring and hook systems to keep them on my belt, and require a sort of "rock-and-twist" action to remove them. Somebody would have to be REALLY determined to get my paddle holster off my belt to succeed in removing it without my consent...
As for "retention levels", there really is no "scientific" way to describe the different levels. They have to do with a series of retention tests, and redundant locking mechanisms. But here is it, in a nutshell:
Level 1 = some sort of simple strap or thumb-break that holds your pistol. Any "old school" leather holster (or newer, polymer or nylon holsters) with a thumb-break strap classifies as a Level 1 holster.
Level 2 = some sort of "internal" locking mechanism holds the gun in place. The Blackhawk Serpa CQC, the Safariland 2955, and the Bianchi Evader all classify as Level 2 holsters.
Level 3 = a conbination of an internal and an external retention device. So the Serpa LE Level III Duty Holster and the Safariland 070 SSIII and Raptor 6070 classify.
Safariland has a rather convoluted explanation for the Retention Levels, and their particular testing and certification regimen, and you can read it here:
The higher the retention level, the more secure your firearm is. However, this security comes with some trade-offs. Higher retention levels also require that you activate more "controls" on your holster to allow you to draw, which can slow your draw down TREMENDOUSLY.
The Serpa CQC is probably the fastest-drawing L2 holster out there. OTOH, the Safariland 070 L3 holster is perhaps one of the slowest. In addition to knowing how to properly draw operate, and reholster your firearm, you need to learn the "tricks" of these retention holsters. Some of them are very intuitive. Some are like learning "chinese math". They ALL take practice to become safe and proficient. Safariland says that you need to do 200 properly executed draws from one of their L3 holsters to be considered proficient. I practice drawing from my Serpa CQC almost every day, usually doing a dozen or so draw and re-holster cycles.
I recommend that anyone who OC's use at least a thumb-break, if not some sort of Level 2 holster. I use a Serpa CQC (level 2) for my Para Ordnance, and a Bianchi Special Agent (Level 1) for my Walther P22 (but only for when I'm on the range--when I carry the P22 as a BUG, I use a pocket holster)
As for the spare mags, I carry a Para Ordnance S-14.45. I carry one extra mag most of the time, in a Blackhawk polymer mag carrier (tan, to match my CQC holster). I also have a Galco leather 2-mag carrier in blackleather, which will nicely match my Galco SSS. That rig will most likely be used ONLY for range use, or CC, because it has no active retention...
I hope this helps...