Hi Pruthvi,
1) Yes. You will need to download XI content into the "Integration Design" part of XI
2) You will find the path in "Support and Packages" - Search for ESR and then search for XI Content
3) What you design in XI depends on the SCENARIO that is being implemented by the business you will find this in the marketplace documentation for SRM
OSS note 705541 should be a good starting point for you.
Further to question 3
You will have to confirm mappings in the sender and receiver part of the XI scenario
Setup the relevant IDoc exchange properly