1) you can do them afterwards. I´d texture my char before enveloping anyways.

2) blendshape will distort texture. but when animating the char after binding the skin to skeleton a distortion in certain areas will always happen. with or without blendshapes.

3) that depents on how you smooth it. I guess you don´t mean tessellating cause that will not work. never smoothed any character with explicit operation.