After entering your credentials into the spaces provided using your phone and submitting the data, your phone should automatically sync with Facebook and, depending on your phone's settings, should change the pictures in your contacts app to those of your friends' profile pictures.
The Facebook app has been having a lot of issues lately. If you mainly use it for chatting, I suggest you download the Facebook chat app called Messenger. It's much faster and more user friendly than the actual Facebook app.
If you plan to use Facebook on your phone for the actual features of commenting on posts, submitting posts, etc. then I suggest you use your internet browser for Facebook.com. It's faster, looks better, and runs smoother than the app.