> og fagnar honum blíðlega.
> and rejoices in him kindly

"and welcomes him kindly/affectionately", "gives him a friendly/warm
welcome"

> Hann hefir gert oss hvetvetna illt.
> He has performed bad (deeds) to us everywhere.

"He's done us all kinds of ill." 'hvetvetna' = 'hvatvetna',
'hvatvitna' "anything whatsoever, everything". You were thinking of
'hvarvetna' "everywhere".

> og þóttist eigi vita hvað jarl mundi mest meta.
> and bethought-himself not to know what (the) earl would most value.

MM & HP have "Th. racked his brains, for he could not be sure what the
earl would appreciate most." But I don't understand why. Wouldn't it
be obvious what (action) the earl would appreciate most: handing over
Hrapp! I wonder if it could be interpreted as saying something like
"he couldn't imagine *how* much the earl would value it if he handed
over Hrapp"; that is, he'll be rewarded beyond his wildest imaginings.
So he's tempted but eventually resists the temptation (hence the
contrastive 'þó' in 'þrætir nú þó að Hrappur sé þar'). Compare
expressions like: 'hvað ertu gamall' "how old are you?" I'm not sure
though; I might be barking up the wrong tree with that...

> "Ekki má það þá,"
> 'That may not (be) then,'

MM & HP "We cannot do that, then" (i.e. can't go and force them to talk).

> "Þér mun það kunnigast,"

'That will (be) best-known to yourself,

Yes, as if to say: "You should know; you hid him."

> yahí (typo?)

Must be. Ignore the 'yah'. Konráð Gíslason and Eiríkur Jónsson's
edition has:

`þjer mun þat kunnigast' segir jarl `enn
ef ek skal geta til, þá ætla ek, at þú hafir
áðan fólgit hann í vatnkeröldum þeim, er hjer
váru við skipit'.