Q1) Another waveguide can be made to take the place of cladding. The Depth field of the waveguide properties dialog box is the Y coordinate of the bottom of the waveguide. Set this number to 0 and the waveguide will be at the bottom of cladding, set the number +ve and the waveguide will be within the cladding layer. Since it is a waveguide, this layer can occupy any part of the wafer.
Q2) You probably can’t use gold for the cladding if you are using the Beam Propagation Method. The BP method is paraxial, and materials that introduce high refractive index contrast, like gold, will almost always create rays that depart far from the axis of propagation, Z. As such, the propagation is not paraxial, and BPM is inappropriate. The only exception is cases where the gold material does not directly interact with the light, as in electro-optic devices, or the geometry is such that non-paraxial rays are not generated.
Q3) The User Function Profile is defined only in the substrate, Y < 0. As such, it is convenient to use for waveguides that are “glass on 3 sides”. The User Function Profile does not extend into the cladding.