Do you log your occupation?

You should be setting your activity level as lightly active to active as a base. Sedentary/lightly active is what people with desk jobs do. After that, don't log your occupation. You can log exercise though. That's MFP settings.

I have no idea what to do with the fitbit since I don't use a pedometer.

I'm a chiropractor and on my feet all day. I do a lot of manual work with patients, lifting and mobilizing them, showing rehab exercises, etc. I also work out at the gym a few nights a week. I set my lifestyle as sedentary and keep it that way for my calorie count. I haven't felt deprived on the calories that have been set for me, and I've been able to consistently see decent weight loss. If I workout I add those calories to MFP and somedays I will eat part of those calories back. I think setting a lightly active base would be fine as well - just try it and if you aren't seeing good results, re-evaluate.
My personal preference is that if I see I am allotted more calories to eat, I will most likely eat them. Sedentary works, and because I've been able to modify my diet and eat healthier I don't find myself starving or wanting for more food throughout the day. Plus my extra work activity has allowed me to consistently lose 1/2 pound to 1 1/2 pounds per week for a couple months.

No.

Your body is accustom to that activity its part of your NEAT.

If you count it as exercise or eat more based on additional calories you think you've expended you will soon wonder why your progress has stalled.

I've been doing it a little over a year now. I've lost about 36 pounds in the last year and I have about 20 more to go before I reach a weight I'm comfortable with. I usually lose about a 1/2 pound a week, and it depends on how consistent I am with eating. In Dec 2015 and Jan 2016 I was into all the holiday festivities so I didn't lose anything for 8 weeks (but I didn't gain either). I re-focused in February and I lost 3.8 pounds in 4 weeks and officially went down another pant size.
My goal is to stay focused these next few months and not get lazy about counting calories. Everyone is different, but I just found that if I set my TDEE as if I sat on my butt all day that I tend to see better results. So far in the past year of doing that, when I stay within that daily calorie goal - I see a good downward trend. I went off the deep end last week and snarfed down a whopper with cheese one night, and I still managed to go down half a pound for the week so I guess I had calories to spare.

Also, with less calories to work with I was forced to eat higher protein, higher fiber foods - so my veggie and fruit intake is quite good at the moment.