For converting plain text files, Calibre actually processes the source as a form of simple markup named "Markdown." If you check out
the Markdown documentation, it says that you can insert a hard line-break by ending the line with two spaces, so you might give that a try.
For the LIT->LRF paragraph indentation, I know the LRF converter(s) accept the command-line option '--minimum-indent' which allows you to specify a minimum paragraph indentation (in points), although I'm not sure where the option is in the GUI. If you convert to EPUB instead (which I heavily recommend), the option '--remove-paragraph-spacing' will do exactly what it sounds like you want.