Yep, it's normal. The raw files will have no processing done by the drone's camera.
If you're after the best possible photo quality and the maximum flexibility for post-processing (editing photos on a computer after you've downloaded them from the drone), then raw files are the way to go. It's a more complex process and something you might want to put off tinkering with until later and you get deeper into photo editing.
The photo and video processing done by the drone is very good, and it's perfectly fine for most applications - for viewing on phones, computers, most television sets, and reasonable sized prints. I'd guess that 95 - 98% of drone fliers use the photos and videos directly from the drone and never shoot raw.
Regarding ISO, keep it as low as possible for the best image quality. The auto settings do a fine job under most circumstances. You can also use pro mode and fix the ISO at a low value and allow the auto function to control the shutter speed.
Unsolicited simple tip - many people like to underexpose their photos and videos slightly, using the exposure bias control, EV on the controller screen. -0.3 or -0.7 makes the colors look a bit richer.
If you have a really spectacular scene and want some "insurance" on getting the right exposure, use the AEB photo option to automatically shoot a range of exposures.
Have fun.