Family Sharing

No, read How to share albums in Photos on your iPhone, iPad, and Mac - Apple Support about about how to share photos. Apple used to say on its Family Sharing page that a shared folder was automatically created when you start Family Sharing. I don't know if that still happens and Apple simply removed that information from that page, or if you now have to intentionally follow the instruction in the first link I provided. If a folder is created then simply don't add anything to the folder.

No.

You must manually add them to the Shared Album for them to be shared.

Make sure each person in the Family Group is using their own Apple ID. Apple ID's should not be shared, and Family Sharing does not require you share an Apple ID for any reason.