Fix setup.py to work when called outside its dir

When we call `python /path/to/setup.py install` from another directory,
the installation breaks because python tries to open README.md from the
current working directory, which is different from where the file is
located.
Add short description in README.md
Ignore source distribution files
Fix typo in filename CHANGES.md
Fix MANIFEST.in
Fix url and add classifiers in setup.py
Convert *.md to *.rst