You should install bootmii as boot2 if possible, it is safer than IOS install.

Yes you store the NAND backup on your PC so you can use it if you ever need to say you install something that will not allow you to load the main Wii menu, you can use your backup to roll it back to a moment in time when everything was working.

Use Waninkoko's updater to update to 4.1. It is not advisable to update to 4.2 at this moment in time but you can use the OneUp release of the shop wad to update your WiiShop to the latest version. Don't ask where you can find this, you will have to find it yourself using the information we provide.

Waninkoko's updater:

http://wii.ds-scene.net/?s=download&viewfile=3d1fd987cbfa69ee30f84e03d3c123b1

Latest WiiShop:

http://wii.ds-scene.net/?s=viewtopic&nid=6944