Interesting that they list "iTunes Connect internal testflight" as a supported distribution method (in addition to external testflight). That must surely be against some kind of terms of service and developer agreement. Also, it's a pretty bad idea either way because you would have to grant the testers access to your iTunesConnect. :O
That's not true. Testflight is clunky but secure and gets the job done. You just enter in the email addresses of people you want to receive a test version, and those people need the Testflight app to use it. IIRC You can even control which users are distributed which version
Out of curiosity, have you personally used Testflight? Maybe it's changed since I last did