What you have to remember is that a lot of that stuff you are installing you
don't need as a user. However it may satisfy a dependance for something you do need. For instance. you'll install quite a few libraries which you may never use before building gcc. But you can't build gcc without them. some linux distros don't even include gcc in the release because if you are using a package manager that just installs binaries, and you aren't a developer. you don't really need it. Bottom line, you may not need some of those programs when you are done, but if you actually want to learn, you should try to learn why they were installed in the first place. You'll have plenty of time to look it up while you are compiling
To answer your other questions.
1. maybe. If you run "make install" the program will install at the prefix defined in the configuration script. This means that if your prefix is /usr all binary files will go to /usr/bin or /usr/sbin
LFS tells you how to set your prefixes. For the most part. Most programs end up where they should without the prefix argument but you should probably follow their instructions.
2. Yes. It is possible, most installs of linux are just that. Precompiled binaries which are somewhat transparently configured.
If you want a minimal setup like this to start from give gentoo a try. With gentoo you download "Stages" basically a really basic set of commands and the package manager which compiles everything on the fly. Next you tweak it so it's bootable, boot in to your os and install whatever you want. In my opinion, if you want to start from bare bones but have a working system in 3 hours, that's the best way to do it.