Hi,
1- DCS can search Saved Games/DCS/Liveries, DCS installation folder/ core mods/aircraft, or DCSinstallation folder/ Bazar/Liveries
2-If you install to saved games, yes you need to create. For example "F-16C_50" is viper's livery folder name. And inside this folder you can install your livery. Name doesn't affect your livery name. You need to edit livery name in description.lua
3-You can use modelviwer for finding issues and real time refresh.
I hope it helps.