Normally you won't need to touch the Mobi Setup and Epub Setup tabs. This is the first tab of the exporter template. However, the drop-down is empty, and so we need to click Edit to set up an exporter template. On this screen you can pick the first and last chapter to export, and below that you can decide whether to export to Mobi, Epub, or both.
Step one is to click Project - Export - Export to Ebook from the yWriter main screen. The resulting ebook should be formatted correctly without any nasty surprises. This routine will export your novel to an html file which is optimised for conversion using Calibre. So, yWriter has an 'Export to Ebook' feature.
yWriter does have an HTML export, but it's designed to display or print your work, not export to ebook. The problem is, most word processors pack a huge amount of hidden code into a simple html file, and all this cruft can lead to odd-looking formatting when you convert the files to ebooks. See Guido Henkel's useful articles on html ebook formatting
