At the moment the automation envelopes is one of the problem-areas in lmms. (Realy good high dynamic filtering would be an other)
Automation Envelopes is expected to get an overhoul in some upcoming release, so it will be posible to have moveable 'mousepoints' whith conneting lines -perhaps even smoothing of the curve.
Recording live-time events has afaik never been discussed -You could add it on the 'Wish-list'.
For now you have to draw the automation and it can be really frustrating
A trick, in case you dont know about it, is that holding shift and clicking in the envelope will create strait lines.
Also, using 25% magnifying is often helpfull.
BR