#1, if you start with a 1st level character, there's just one development step, and as tbigness noted you add the ranks for your culture. 1st level characters are neophytes so if you choose to start characters at 1st level, keep that in mind when designing challenges for them. Personally I like starting at 2nd level but it's up to the GM.
#2, just to make sure that's clear, you add up the total skill bonus for Body Development, including stat bonuses etc just like any other skill, and then also add the base hits to get their total.
For #3, if you are using piecemeal armor, you roll the critical at the same time you roll the attack. Then look at the location for that critical roll (which will be the same on every critical table), and use the AT for that location.
#4, every character does get a realm, so Arms characters need to pick one (page 53) and will get the bonus for their realm RRs.
#5, check boxes for figuring out development for your next level. You don't have to use them but we always liked them.
#6, the skill bonus will be -25 but you do still add the stat bonuses to those skills. In some cases if you don't have the skill at all, you might want to try to use a similar skill instead (if you have anything suitable), pg 84.