I think if you go into your "edit menu" or select properties on the
terminal shortcut, go into the command box and add "--full-screen"
(without the quotes) it will open in full screen. Alternately, if you
at "--geometry 1200x700" (or whatever resolution you want) you can
specify it that way. I think both of those would work.

tty is the abbreviation for "teletype" (or teletype terminal). I
believe it got its name from early unix use where everything was done
in a text terminal.

In Ubuntu, there are seven of these (accessible through holding down
alt+cntrl and pushing F1-F7) alternate shells. The X (our graphical
environment) runs in tty 7. You can try it now if you like, just end
with cntrl+alt F7 to get back to your desk top. Each tty will bring
to to a login for a linux shell that basically looks identical to what
you would see if you were running a headless server (i.e., without
x-org and gnome). I don't have all the details or history on it, so
maybe someone can chime in with the full description.

For me, going to an alternate tty is very useful when my lockscreen
freezes after a suspended state. I can switch to a different tty, run
"ps -A | grep gnome" to find the process number for for the
screensaver and kill it so I can get back into my desktop. Otherwise
though, I don't really know what they are there for.