The reason we have energy at all is not a big mystery. The sum of energy in the universe is still zero, conservation of energy was never violated. If you recall from physics, some energies are negative, such as gravitational potential energy. So we have 1, and -1, but it’s still zero as a whole.

But why {1,-1} instead of 0? Because it’s more disordered and therefore more stable. But then why order? Because the universe is expanding faster than entropy can fill it so it is forced to become more cold, stable, and orderly on local scales.

I’d suggest taking a look Victor Strenger’s stuff, it’s amazing and goes into a lot more detail.

As Scotty mentions above, the paddlewheel is meant to be in the 2d (horizontal) plane. So rather than a paddle wheel like you have on the riverboats, imagine the axis pointing straight up, and the paddles sticking out of the water like a wall. The top and bottom half get pushed equally so it doesn’t turn.