1. Correct. You must run the .m file. .fig files are not designed to be executable.
2. You renamed your .m file and .fig file outside of GUIDE. When you do that, GUIDE gets messed up. If you want a different name, you have to do it within GUIDE. Now you will need to check all the code in the .m file to look for references to figure1 and you will need to use the property inspector to go through all the object properties in your .fig file looking for references to figure1 . You will probably find it easier to delete your existing .m and .fig file and to rebuild it in GUIDE.