What does it mean "What did ___ do with ........retirement money? Cash it out, etc...

It means did you use it for anything else other than moving it to another or the same retirement account.  

What if it's not eligible for rollover into another retirement account? This is just a monthly cash payment.

TurboTax will know it is not eligible - but the question comes up on every 1099-R entry so just answer ''did something else'' ''took the cash'' or  anything but rollover.    @dazedconfused