There are MANY reasons why we don't recommend using GoDaddy for hosting, especially for database-driven sites such as an online store. The usability challenges you're facing are just one such reason.
Further, hosting on their Windows servers is yet another complicated challenge especially when it comes to changing file permissions.
If you want help with problems you're having while hosted with GoDaddy, contact GoDaddy. They're the experts on the odd things they've done with their servers and can teach you how to use the tools they've given you for managing the services you've purchased from them. That's part of what you're paying them for, so use it well.
As for the "500" errors, if you read the FAQ article which kuroi pointed you to several days ago, it explains the kinds of things that can cause such an error, and also tells you that it's your hosting company who will have to diagnose the specific incompatibility of their hosting service which is causing their server to trigger the error. Again, they're the experts on their servers, so escalate the matter with them directly.
As for your education process about what's "wrong", ask GoDaddy ... cuz your problem is largely unique to the server you're hosted on.
You will certainly find that relocating to a more conventional hosting service will work far more readily out-of-the-box and be much simpler to configure and manage and support.
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