Too much info, or not enough
I've never tested on a K1 so don't know if it will work. But since collections aren't supported on K1 I guess it can't hurt to try.
You don't need to worry about tweaks any more, or custom columns, etc. This thread has a lot of detail that is no longer relevant or for advanced use.
By default if you start the plugin the first time it will automatically create collections based on author names, series names, and all your tags. Just run it with Preview to see what would get created.
If you want to just do tags, then use Customize and uncheck authors and series.
If you want to ignore certain tags, then just add their names to the Ignore column for tags.
So if you only have 'tags' checked in the plugin, and in Calibre you have tags 'History', 'Science', 'Fiction', 'toBuy', and you check the tags column, set the Ignore column equal to 'toBuy', then you will get 3 collections on your Kindle called 'History', 'Science', 'Fiction' filled with any books that had that tag in Calibre and are actually on the Kindle.
Using Preview to see what will happen makes it easy to see what will change.