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As black said you have one in the device already. It is required to be able to take and save pictures on the device. It's needed to save music or any other media on the device as well. A lot of apps store information on the SD card. (not the app itself but some data/images etc).
Basically without an SD card your device is very limited.
yes and yes.
the card is located inside your battery door, north of the battery (where you might expect a SIM card to be). removable and replaceable, but not hot-swapable (dumbly)
you can check how much space you've used and how much is free by going to your Setup -> SD Card & Phone Storage