I'll address only the arbitrary constant here.
I don't quite understand how they were able to convert $c$ into $\ln c $
Yes, it's true that $c$ could be negative. But the $c$ in $\ln|\sin x| + c$ and the $c$ in $\ln c$ are not actually the same $c$. This is a fairly standard borderline abuse of notation in math. Generally we use $c$ (or capital $C$) to represent arbitrary constants of integration, even when those arbitrary constants change form, so to speak.
A more pedantic approach would be to explain as follows:
$$\ln y = \ln |\sin x| + c$$
At this point we would like to remove the natural logs. So, since $c$ is some arbitrary real number and since the natural log function is surjective onto the real numbers, then there must be some other (and positive) constant $c_2$ such that $\ln (c_2) = c$. Then we have
$$ \ln y = \ln|\sin x| + \ln(c_2).$$
Well, $c_2$ itself is just an arbitrary constant ("arbitrary" subject to the restriction that it must be positive), so let's just keep calling it $c$ so we don't get everything muddled with different constant names. Therefore
$$ \ln y = \ln|\sin x| + \ln c.$$
In short, you may see solutions that always use $c$ to represent arbitrary constants, even if they are different arbitrary constants along the way. But the only constant we really care about is the one in the solution we obtain at the end. That's pretty much how we justify calling all arbitrary constants $c$ or $C$. So in this problem, the only arbitrary constant we care about is the $c$ in $y = c \sin x$.