1. Why loop gain curve is not flat at the beginning? Theory shows that at low frequency loop gain equals to T0=β.Gm.Ro and hence should be flat
Although your measurement/simulation concept for the loop gain is not clear to me, I guess the transformer is responsible for the first (rising) part of the magnitude response.
2. Why is the step response showing these humps? Is this because of loop gain issue? or something else
I have no explanation; something must be wrong
(By the way: Your simulation arrangement is not easy to interpret; which loop gain simulation principle are you going to use?)