1. As far as I remember, you don't need to set up any payment if you want to publish a free game.
2. Nope, it's just a web upload of your package, if it's an executable, or a zip with an index.html if it's web
3. You don't have to but it's the preferred way, so that entries can remain in time
Since the submission process uses the normal itch.io game upload, I'd suggest you upload a test game before the 7DRL just to get the hang of the process, it's really simple.