Can you breed in Pokemon Firered?

Answer 1

Yes you put 2 Pokemon in the day care on 4 island and they might have an egg. But you can't breed legendaries.
Yes head to four island and in the daycare center put in a ditto and any other Pokemon besides baby Pokemon and legendaries take a long walk talk to the old man to receive an egg hatch it to get a baby Pokemon for example: Ditto+Raichu=Pichu.
Yes, you can breed in fire red, but first you must beat the E4. Then later after you get the sevi ticket, go to island 4 and there will be another day care taking 2 pokemon.

Answer 2

Yes, but they must be compatible to breed.

Answer 3

Yes you can, but you must first have completed Islands 1-3 (to get the Rainbow Pass), the Breeding Centre is on Island 4 (so requires beating the Elite 4).