1. a) Must be notarized if your diplomas are not in English or French. b) Only the hightest degree is enough.
2. Yes, if you have enough score for your working experience. But you better provide that, other you will have a gap in your listed history, probably you will be asked to provide in future. This is quite easy, ask your previous supervisor sign your drafted letter printed on the company letter paper.
3. Either with you application or after second letter is fine.
4. Better including police certificate with your application, that will shorten the time between second and third letters. For the period in China, go to district Notarization Agent (Gong Zheng) and they will do that for you. For the period in US, follow the instruction in your application package.