Assuming you're using Wheelock's on your own rather than at school, the
official answer key would probably be a great help. But to answer your questions...
but volat, if by itself, would be "He flies." wouldn't it?
"Volat" by itself could be "he flies", "she flies", or "it flies". You have to use the context to figure out which.
10. "Nihil ME terret." It doesn't make any sense to say, "He terrifies me nothing." and yet, if it were, "He doesn't terrify me." then I think "nOn" should be used and not "nihil", correct? So the only thing that makes sense is to say, "I am terrified of nothing."
Correct! I wouldn't have used that thought process, but then, I'm much more experienced with the language (though not necessarily good at it!), so I have a better idea of what to expect from Latin sentences. So I would have thought something like this:
* Nihil: "nothing". Probably, but not necessarily, the subject of the verb.
* Mē: "me". This is accusative or ablative. (I don't think the ablative was introduced in Chapter 1, but you'll get to it soon enough.

)
* Terret: "frighten". "Mē" can't be ablative because it would have no meaning with this verb. Therefore, "mē" is the object. Therefore, "nihil" must be the subject of the verb, since it seems to be the only way it could fit into the sentence.
Put the three together this way and you get "Nothing frightens me."

This generally happens fast enough for me that it happens instantly, rather than seeming to be distinct steps, but sometimes, especially when reading "real" Latin, I need to slow down and the steps take much longer.