Yes upgrading to 4.01m33-2 is pretty much that simple, just download the required files and read the read me.

Not the best person to explain kernel, but some applications require a different Kernel to be used to run that app, depending on how it was coded or whatever. When you upgrade you'll have to install the new 1.5kernel each time in order to use 1.5K homebrew (thats if u want to, not a must though). Really easy though takes a few seconds.

No you dont need anything to play DLed psp games, just put either the .iso or .cso int the ISO folder on your memory stick root.

Popsloader is for playing ps1 (psx) games, you dont NEED it, but it's handy.

Yes get nitePR