Regarding the part of his signature move that says, “If he began the action adjacent to 2+ Ropes, modify damage +X, where X is the amount your attack total exceeded the hit character's defense value.”, is it correct to assume that this is for the CLOSE action?

So for example: Macho Man would do a POWER to use Charge. For the movement part of charge he puts himself in a position to be adjacent to 2+ ropes. Now with the CLOSE at no cost from charge, he would be able to use his Flying Elbow (as well as be able to move 3 squares in the process) and get the damage modifier.

Does this sound right?

Sounds right to me. I might be wrong.

Yes, but only if he already has 1 action token. You don't assign the action token until after the action resolves.

I know that.