It is illegal for the sponsor to hold your passport. Your passport is the property of the Government that issued it and you are the legal holder of it at all times. In order to get your residency permit in your passport, you will need to give it to the relevant authorities - usually a couple of weeks - and then it is returned to you.

Safety is how well you look after yourself. I've lived here by myself for years, never felt unsafe - I am careful to keep my doors and windows locked and to be aware of my surroundings/environment so I know if something "isn't quite right". Just as I would in my home country.