1. You are right that raw denim stretches upon wear and shrinks upon wash. The right size really depends on several factors but to put it simply in 2 points 1) Make sure the waist/upper thigh is snug/perfect when you first buy as the stretch/shrink will most likely offset each other eventually. 2) For the rest of leg, as there is less "stretchability", we typically recommend our customers to get a slightly roomier fit as it will shrink more in the wash.
2) After wearing for 6-xx number of months...Soaking reduces the amount of shrinkage and indigo loss compared to machine washing. The "soak right after you buy" refers specifically to unsanforized denim (i.e. not preshrunk denim)
3) Subsequent washes do matter to a smaller extent as every wash will even out the fades. "Smaller extent" because after the hold-out period before your first wash, you should have already achieved a desirable fade contrast.
Let me know if you have any other questions!
-JP