Hello @tomtom22
to you first question: it doesn't matter whether you press and hold the reset button to get the M5AtomS3 into download mode to burn firmware or let the automatic do it.
The press and hold the reset button method is available in case the automatic download mode fails. This can happen if for instance the currently running firmware has an issue causing the device to constantly reset.
I personally let the automatic download mode do its thing and only if that fails use the reset button method.
Thanks
Felix