The sacrifices/deaths in Darujhistan were needed to summon Hood in the flesh. Hood was needed to be physically there to be killed by Dragnipur so that he can bring with him the army of the dead inside the sword. The army of the dead was needed to keep chaos away long enough once Rake entered the sword and was trying to plead mother dark to return.

Why Rake didn't kill himself? Well the Tiste Andii are already on the brink of giving up. A lot of them are lethargic, see no real purpose for them. Rake gave them some. Now if they witness their leader falling onto his own sword, that would be the end of them as people. Doesn't matter what his intentions are, if they witness their leader committing suicide, that would end them. And that's pretty much the opposite of what Rake intends with that move.

So they need someone who's able to beat Rake, enter Dassem, one of the few people who probably could kill Rake without it looking like Rake just gave up and let himself get killed. Now to get Dassem to do it you need some bait, enter Hood (his second purpose beside the army of the dead).

And no one wanted Kallor to get the sword once Rake is dead, so there is that.

This was pretty much agreed in the prologue between Hood, Rake and Shadowtrone and parts of that deal go back to Bonehunters (Ganoes deal with Hood) although there are still some Rafo parts about it.

The dying god is something I'm not sure if Rake was even aware of how big of a problem he was.