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Thank you for your qeustion.
One advantage is that it is less expensive because no lawyers are required. The pros and cons are pretty well discussed at
I cannot offer legal advice, but my opinion is that you should go along with the Court's suggestion and dismiss the existing case WITHOUT PREJUDICE and try conciliation court, if that does not resolve the matter you can appeal for a new trial in civil court. As stated at the above link: "Filing an "appeal" (i.e., removal to District Court) involves a "do over" of the whole case, and there is a civil trial at the District Court."
I hope this information is helpful.
The County Law Library will have legal practice books with samples of the forms you need.