Well, for the refresh/clear cache/delete cookies... I sometime have this issue to... I just log out everywhere (WP, FTP, etc.), I close every program, close my computer and wait a few minutes before restarting everything... I don't why it happens...
For your coupon, if you want to offer free shipping for everyone who order over 500/-, you don't need the coupon... just set the Free Shipping method.... ;)
If you're not offering the free shipping for everyone who order over 500/-, then you have to check the "activate the free shipping" option in your coupon AND set the Free Shipping method (don't forget to check the option "Coupon code").
And on my site, I offer different shipping methods. And Free shipping for orders over 150$. It is weird as when the cart reach 150$ or more, customers still have choices between "local pickup", two shipping companies, or Free shipping.... But if they choose Free shipping or local pickup, nothing is added to the order total...
On my site, I set the shipping method Flat Rate to 50$. Then in my Free Shipping method, I checked the Coupon Code option, and I created a free shipping coupon of 50$ (with the "activate free shipping" option checked).. and it works well.. without the coupon it is 50$ for shipping, and when entering the coupon I see -50$ just before the order total...