Linux LVM is the Linux Logical Volume Manager. Essentially, it's a more sophisticated way of handling disks and avoids the limits with the legacy concept of partitions.
If you didn't configure LVM originally, then you shouldn't use it unless you want it specifically. So you should pick Linux. At this stage you're not formatting, you're creating a container (partition) and telling it what kind of container it is.
The second stage, when you create and format a filesystem describes how the data in that container will be used (that's a rough approximation). Different filesystems have different performance and security considerations.
It's not a problem, as you put it, it's about choice. Windows does handle disks in the same way (on PC compatible hardware), but some of these choices are hidden from you, but they're still being made (on your behalf).