Thanks for the responses!
I wrote to Paypal and they told me that although it would be fine to remove the 'target="Paypal"' section, it would mess up the shopping cart a little. So I have to live with it until Paypal fixes their code.
Also as per the hidden elements, thankfully each section I have has a graphic/link from Paypal, which the fieldset/legend works fine with. It also does -not- add in extra spaces for each hidden input I have, which I thought it would.