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From what I understand of the OP's post, he wants to hook up a MIDI keyboard directly to the UX2, that cannot be done. Assuming keyboard USB connectivity, he would plug that directly into the computer via USB.

There are no MIDI input or output jacks on a UX2. The USB is only for audio out from the UX2 to a computer.

Some sound patches are mono on keyboards, some have 'enhanced' sound with reverb, etc, to give a stereo presence, and others are full-on stereo.

Are you recording through the USB connection?

What are you using for cable/adapters? The keyboard's stereo headphone output is TRS. The UX2 is mono, TS. For best sound from the keyboard, you would want to use a splitter adapter to go from stereo TRS to 2 X mono (left and right). Unfortunately, the UX2 does not have 2 1/4" inputs you can use (the 2nd guitar one has a pad on it), so going from the left and right splits, you would probably need to adapt from TS to XLR and use the mic inputs (this could create noise or clipping issues).

When uninstalling/re-installing PodFarm, you should delete all Line 6 folders/files before re-downloading and installing (back up your presets first!)

No, the shortboard is just a controller. The sounds and FX are in your amp (or in Podfarm).

In your DAW, you should be able to elect the Korg as your MIDI input device and the UX1 as your audio input device. I can select the 2 sources independently in Reaper.

You can download all the files you need from this site. Click on the 'downloads' link at the top of the page.

Make sure that in your computer you have the UX2 set as your audio output device.

What do you mean 'the sound quality is not the best'? Settings should be in your DAW, you should be recording exactly what's coming out of your pedal board. How are you monitoring?

I'm guessing that you need to go into the laptop's audio settings and select the laptop's speakers as your output device. Not familiar with Cubase, but it may only allow one audio device (for both input and output) at a time.

Of course it can be used that way. Plug it in and try it!

The FBV selects from the current bank selected on the amp - you select the bank using the amp's controls.

Ok, so are these tracks (guitar that sounds bad/low) all using PodFarm? That's what sounds like the problem is - PodFarm is not loading correctly, although why they should sound ok when not through the UX1 doesn't make sense for that. The UX1 itself can't distinguish between tracks on a recording already done, unless you have it routed incorrectly.