Hello Arjun,
to the questions:
1) I see the same error if generating on Windows 10 64-bit. The error is reported because by default on 64-bit operating system there is used 64-bit java. The MPC5634M Autosar OS supports only 32-bit java so to generate it is needed to install the 32-bit java. Then it is also needed to put the path to the 32-bit java to the PATH environmental variable so that it will be found while generating in Tresos.
The version of java can be checked with command java -version executed from command prompt:
c:\>java -version
java version "1.8.0_201"
Java(TM) SE Runtime Environment (build 1.8.0_201-b09)
Java HotSpot(TM) 64-Bit Server VM (build 25.201-b09, mixed mode)
On my windows 10 computer there is used 64-bit java by default (see the string “64-Bit Server VM”).
I have modified the path variable with the following command to add path to 32-bit java:
c:\>path="c:\Program Files (x86)\Java\jre1.8.0_201\bin";%path%
So then the java version reported is 32-bit (string “Client VM”) as shown here:
c:\>java -version
java version "1.8.0_201"
Java(TM) SE Runtime Environment (build 1.8.0_201-b09)
Java HotSpot(TM) Client VM (build 25.201-b09, mixed mode)
After this I open the Tresos with this command (still in the same command prompt window):
c:\>c:\EB\tresos2010.a.sr4\bin\tresos_gui.exe
and I can generate correctly without any error.
If you prefer you can just add the path to the 32-bit java to your PATH environmental variable so that 32-bit java would be always used (but be careful that this could impact other programs that might require 64-bit java).
2) There can be used the newer version (Tresos 2010.sr4) to configure both MCAL and OS. See the MCAL sample application (located in c:\Freescale\AUTOSAR\MPC563XM_MCAL3.0_RTM_2.0.0_signed\MPC563XM_MCAL3.0_RTM_2.0.0_Integration_Application) where both MCAL and OS are integrated within one project. See here the screenshot from Tresos:

Best Regards,
Frantisek