When to spray paint.

Before spray painting the body, apply layer of primer either Light Gray or White (e.g. Tamiya Fine Surface Primer) to conceal imperfection like scratches etc. To make the surface even smoother and to get rid of small debris after priming, give a light wet sanding with a 3200 grit.

For one-piece bodies, yes.  For those kits where the body is made up of several pieces (not including hood) the pieces must be glued and the seams filled before painting.  But I still do that before putting body on frame or underpan.

Yes.