Hey there and welcome to PA.
A1: Are you working with a split stave or a board? If it is a stave the back of the bow should be the first layer of sapwood directly under the bark and cambium. You should do your darndest to not violate that first growth ring. If it is a board then you still shouldn't cut into the back. In the case of a board you wont have a continuous growth ring for a back, you will get your bows integrity from having straight grain going from one end of the board to the other with as few run-offs as possible.
A2: There are many different sealers that will protect your bow from dirt and water. everything from beeswax to lacquer. I use Tru-oil gunstock finish. your finish wont do anything to keep your bow from cracking or breaking, it will just protect it from water.
A3: I highly recommend getting some sort of proper string material made for bows. The less expensive option is Dacron B-50 the slightly more expensive option is Fastflight. I use Fastflight, I think it is worth the difference. You can get either of them online easily or possibly at your local archery store.
Making bows is a blast, I hope you enjoy it as much as I do. Be patient, be humble, ask lots of questions and do some research. I think the best think to do is find someone in your area that can show you the ropes in addition to asking questions on here. Some hands on guidance is worth quite a few broken bows, in my opinion. Good luck.
