The pressure sensor is located in the console.
You should be setting relative pressure and not absolute pressure.
You need to get a good relative/sea level pressure from a known source.
Most airports are reporting pressure altitude wich is different from both absolute and sea level.
Here is one source for data. go to your state and then select pressure from the menu. You should be able to get fairly close.
http://www.uswx.com/uswx/national.phpThe alarms are just alarms just like an alarm clock they have nothing to do with the settings.
Once you set it watch it for several days and see how close it is to the reference stations. You may have to tweak it a little to get closer.
You will never be exactly the same as reference stations.
Most WX stations have a setting for altitude. I don't see one for the 1090 but I don't have one so don't really know.
Some more guidance.
http://www.weathershack.com/static/ed-barometer.htmlWhere are you. What is your WU ID?