I was reading a little bit about it. Please correct me if I mis-read it. So basically they assign you a "Google" phone number. And I guess I have to let my friends know to use that instead of my cell phone number when texting me.
Yes
But is it possible for my friends to use that Google phone number to call my cell phone (voice, not texting)? If so, how does it work if I have an already assigned phone number by my service provider?
Yes -- You basically use GV as a VOIP service on your phone -- Your provider number is not affected.
Also, can I make my Google phone number private (with no fee involved)?
Not sure -- Google it.