Answer from cs61c-bx (Tuan Ha 16989532) for Question 2
It controls the source that goes into the ALU's second input. If ALUSrc = 1 (asserted), the second ALU operand is the signed-extended, lower 16 bits of the instruction. If ALUSrc = 0 (deasserted), the second ALU operand is the second register file output (read data 2)