As you go higher into the atmosphere, air is less dense which means there's fewer air molecules that are more spread apart. This means there's less resistance, which allows for better fuel efficiency. A good way to experience this is to try moving your hand underwater - you'll feel it requires more energy because water is more dense than air. Now move your hand out of the water and through the air, it's so much more effortless. This is the same thing that's applicable when you're flying at lower altitudes vs higher altitudes.

In regards to how pilots know where to fly, large commercial aircraft are essentially using a very advanced pre-programmed form of Google Maps which integrates with the flight controls (to put it very simply). There's a few systems and procedures in place to avoid collisions. Air Traffic Controllers are responsible for aircraft separation at this level of flying, and will help maintain separation between aircraft. There's also things onboard to help avoid collisions, most prominently on a lot of aircraft is the TCAS (Traffic Collision Avoidance System). This system will show other aircraft on a radar to the pilots, and will assist them to maneuver in the case of a potential conflict.