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I will try to explain the generalized measurements, and I hope I address all of your questions in my explanation.
Quantum measurements are described by a set $\{M_k\}$ of measurement operators satisfying one constraint
$$\begin{align}
\sum_k M_k^\dagger M_k = I \,.\tag{1}
\end{align}$$
Given a state $\ket{\psi}$, immediately after measurement, it becomes $\ket{\psi_k}$,
\begin{equation}
\ket{\psi} \xrightarrow[]{\{M_k\}}\ket{\psi_k} \equiv \frac{M_k \ket{\psi}}{\sqrt{p_k}}\,,\tag{2}
\end{equation}
with probability
\begin{align}
p_k &= \bra{\psi}M^\dagger_kM_k\ket{\psi}\tag{3.1}\,,\\
&= \lVert M_k \ket{\psi} \rVert^2\tag{3.2}\,,\\
&\geq 0 \tag{3.3}\,.
\end{align}
Measurement outcome is the index $k$ of the state that resulted.
Assume if you perform measurement corresponding to $\{ M_1, M_2, \cdots, M_k \}$ on state $\ket{\psi}$, then there can be $k$ different outcomes which can occur. Any of these outcomes can occur at random with probabilistic odds given by Eq.$(3.1)$.
\begin{equation}
\ket{\psi}\xrightarrow[]{\{ M_1,M_2, \cdots, M_k \}}\begin{cases}
\ket{\psi_1}, & \text{with probability $p_1$ ----- Getting outcome 1}\\
\ket{\psi_2}, & \text{with probability $p_2$ ----- Getting outcome 2}\\
\vdots\\
\ket{\psi_k}, & \text{with probability $p_k$ ----- Getting outcome $k$}
\end{cases}
\end{equation}
You can think of these outcomes as some pointer device in your laboratory. If you have $k$ different possible outcomes for the measurement, in the lab, your apparatus will point to one of the $k$ possible points, and then you can say that $k$-outcome has happened, and then you can deduce that state of your system now is $\ket{\psi_k}$.
So, in general, these operators $\{M_k\}$ can be any linear operators, i.e. matrices, which satisfy the condition given in Eq. $(1)$.
However, there are special cases of this general mathematical framework of generalized measurements where, in each special case, apart from Eq.$(1)$, there are some additional conditions on measurement operators. For example, in Projective (Vonn Neumann) measurements, these measurement operators form a complete set of orthogonal projectors.