Joe,
No need to be embarrassed! The cross-over on the sub is used when you don't do the cross-over setting in the receiver (like you have done). So, if your sub has a switch to override the cross-over, or if it has a specific input that doesn't use it, that's the way to go. Otherwise, set the cross-over dial on the sub to the highest frequency so that it won't be filtering out frequencies that you want it to play.
The phase dial is used to adjust the timing of the sub versus the other speakers. I think that's the right way to explain it. You can adjust it and see if it makes any difference in the way that it sounds. I tend to not change mine, but others here do use that dial.
I'm going to look into your 875 owners manual again. There should be some setting for the speakers that is equivalent to "large" or "small". That setting tells the receiver to actually use the cross-over frequencies that you have set. At least, that's what I'm used to. Let me take a look.