1) Not for the Polybian reforms. The number of battles only plays a role for Marian and Augustean reforms.

2) The recommended difficulty settings are VH campaign and M battles. These are the settings the game is balanced at. Lower than VH campaign will make the rebel A.I. passive; higher than M battle will give the A.I.'s troops unbalancing stat bonuses. They are not obligatory, though, and several players prefer H battles because of the extra challenge.

3) Same as the first answer: this is not important for the Polybian reform.