@Brad You can fix user online issue check here http://www.oxwall.org/forum/topic/8658

Also, if log out, clear the cache and return, all users are still there?

Need some help with this because no idea how to tell who is actually online

Any way Try this /usr/bin/php /home/*****/public_html/ow_cron/run.php

***** = Your Cpanel username

>>1.I see only 12-14 ( I guess) online users In chat box , and if someone who is not being seen online sends me a chat message I dont have any option to see his message, Only the chat bar turns Orange.

Users whom you see online in chat are your friends?

"Chat bar turn orange"- you mean top right console? ( Mailbox)

>>2. After minimizing chat tray with a particular user I don`t get alert for their messages.

When you minimize the chat, it should change the color (blink) when someone sends you a message.

Here is how this should look like ( colors can vary, I am using "Crayon" theme):

>>3.When someone logs In instantly he is seen online in chat box , But he don't get message alert for about two minutes.

Test on my own installation and I got the message almost immediately.

May be Internet connection is the causing this?

Yes users seen are my friends .. 

I dont mean 'Mailbox'

Attaching snap below  right now there are just three users online if the number goes above 12 or 14 i See just message notification (  new message seen in chat bar ) but don`t have any option to reply to that friend 

Quote from Aliia Test on my own installation and I got the message almost immediately. May be Internet connection is the causing this?