Here is a partial answer: I will givea geometric interpretation of Levi flatness/pseudoconvexity. To fix some notation, let $j$ be endomorphism of the tangent bundle to $\mathbb{C}^2$ induced by its complex structure. (I'm being a bit pedantic, normally we say it is the complex structure, but I want to make it very clear what I am describing.)
If you have a real hypersurface $\Sigma$ in $\mathbb{C}^2$, its tangent bundle has a preferred complex line bundle inside of it. This consists of those vectors in $TM$ such that $j v$ is also in $TM$. Let $\xi$ be this subbundle. We say that $\xi$ is Levi-flat if this distribution is (locally) integrable in the sense of Frobenius.
So what does this mean, geometrically? Suppose that $\Sigma$ is Levi-flat in an open neighbourhood of $p \in \Sigma$. Then, by the Frobenius integrability theorem, you can find a local function $G \colon \Sigma \to \mathbb{R}$ whose level sets have $j$ invariant tangent spaces, i.e. the level set is a complex (local) submanifold of $\mathbb{C}^2$. Again, since we are working locally, this allows you to describe the neighbourhood of $p$ as being of the form $(-\epsilon, \epsilon) \times D^2(\epsilon)$, where $D^2$ is the disk in $\mathbb{C}$.
Levi convexity is a bit harder to explain without appealing to the Levi form. See the reference I gave in the comments above for some definitions and discussion of the concept. In particular, a convex hypersurface in $\mathbb{C}^2$ is Levi convex.
The key fact about flatness/convexity has to do with holomorphic disks whose boundaries are in $\Sigma$. If $\Sigma$ is flat, you can foliate $\Sigma$ locally by such disks. If $\Sigma$ is strictly pseudoconvex, then only the boundary of the disk touches $\Sigma$, the interior of the disk is forced to lie in the interior region bounded by $\Sigma$. (For instance, think of the unit sphere $S^3$ as the typical example of a pseudoconvex hypersurface. Any holomorphic disk with boundary in $S^3$ lives inside the unit ball -- furthermore, only its boundary is allowed to touch the $S^3$.)
In an example like the one you gave, the complex line is $\ker dF \cap \ker dF \circ j$. You then want to compute the two form $\omega := -d (dF \circ j)$ on a pair of (nonzero) vectors $v, jv$, $v \in \xi$. If this is positive, then it is pseudoconvex (at this point). If it is zero, it is Levi-flat.