As someone in the same boat, and to answer your questions as best as I can:

(1) "Rise Up Singing" is, in spite of people's grumblings, a very good book, and is familiar to practically every Song Circle in North America. You can't go wrong with stuff from there, or from Jerry Silverman's Folksingers Workbook. Many of the chords for the songs in RUS are slightly inaccurate -- often the 7ths are missing, add a few 7ths to the chord names given, and you are usually doing ok.

(2)Standard progressions and melodies are what you bring, though you hardly need more than the basic I, IIm, IIIm, IV, V7, VIm, chords for most folk music. Blues and ragtime stuff, of course, have slight differences you will know about. A few diminisheds and augmenteds will pop up from time to time. The most sophisticated chording is usually Beatle songs. The odd part about folk music are the odd chord changes that come from modal tunes (see the thread Modes for Mudcatters).

(3) There are a number of threads here on Session etiquette. They are very, very important to fitting in, getting along, etc.

yours,

Peter T.