Yes, it is the preferred method as it will prevent separation of your boards from the fence posts.
No, we recommend that you use ¼ down limestone packed gravel to set your posts in. This will prevent heaving of your post during the seasonal freeze thaw cycles.
You should be setting your posts at a minimum depth of 3 ft.
We highly recommend that you use a spacing of 6’ or 8’ for the spacing of your posts. A 6’ spacing will provide for a much more sturdy fence.