I can answer your questions, but for full comprehension, and answers to the meriad of other questions that will arise during the process, you need a good reference, a good forward-working direction, a good instructor.
My recommendation is to get Dean Torges' book, "Hunting the Osage Bow" and read it cover to cover, then ask questions and begin working on your osage stave. He chronicles the craft beginning to end.
Whether you use a drawknife or a bandsaw is up to you. Don't get caught up in a 'cheating/purist' mindset. Worry about getting a good bow, or two, or ten, made first. Bandsaw/drawknife? Most folks use both. I use both. Throughout the process, I use the tool that's most appropriate for the task at hand. I use the drawknife to remove the bark and sapwood and chase a single ring for the back of the bow(with the help of a spokeshave and cabinet scrapers). Then I use the bandsaw to remove bulk material and reduce the split to a size that allows quick, safe drying, or steaming and bending then drying. I use the bandsaw again once it's dry to reduce it to near bow-sized dimensions... then do the rest with hand tools.
You COULD do all bandsaw work with a drawknife, or hand axe, if you so choose, but nobody that's decent is going to condemn you for using a bandsaw while making a selfbow.
Snakey osage bows are shaped that way for a reason. In those particular bows, the grain of the wood is snakey and you must follow the grain of the wood to keep your bow from splitting/breaking as it bends. The more you cut across the grain, the more you raise the likelyhood of failure. Straight-grained osage makes straight bows. Snakey-grained osage makes snakey bows.
Knots... looking at the back of the bow, you should try to avoid knots in your layout if possible. If it's not possible and they must be included in the limb, then you should try to leave adequate width of good, sound wood around them. If it's close to the edge of the limb, or quite sizable, most prescribe adding an amount of width to the limb at least equivalent to the diameter of the knot. In other words, don't saw through them along the edge of the limb, include them and go around them... leaving good wood around them. On the belly, you must cut through them to remove wood as you shape the bow and tiller it.
Yes, following a growth ring on the back is a must. On the belly, it's not only unnecessary, it's impossible, because in most designs, the limbs need to taper in thickness from the dips to the tips, so you will be cutting/rasping/scraping progressively down through the growth rings on the belly side as you taper the limbs. Even when making a pyramid bow, whose limb thickness is consistant and all tapering is done from the sides, you won't worry about following a single growth ring on the belly because growth rings grow thicker near the base of the tree and thinner the farther up the tree the go... so they will likely vary in thickness throughout the bow. Make any sense?
You really need to get ahold of Dean's book my friend.
Other good reference material is The Traditional Bowyer's Bibles and Paul Comstock's The Bent Stick, but Hunting the Osage Bow is by far my favorite for the journey you're about to embark on. I had only Dean's book for reference when I made my first selfbow, I had never even held one prior to that, and my first, second, third selfbows were successful and still shoot to this day.
Best of luck to ya.