Petr, since you asked about encryption methods, I looked around this forum. In another thread "Question about database encryption algorithm", ondrej.novak commented that "We suggest to use the default encryption (AES (Rijndael))." On that basis I won't be trying other encryptions unless someone has a good reason.
FWIW, my default.pws file is 2.6MB. I noticed in the thread mentioned above that others expect it to be only a few KB. I keep default.pws in a DATA partition (D:), not on C:.