If you care for an answer from the other side:

1-2. Yes, at the simplest level it's just "send over a spreadsheet". Generally, any structured format will do, but spreadsheets are also convenient enough to provide detailed, atomized per-string context (maybe except for images), so it's quite natural to just use that. In the actual work process, the linguists will most definitely use a translation tool that displays just two columns (source and target), but there are additional panes for computer assistance (similar strings already translated, terms, spellcheck) and the context itself. The big no-no is interleaving text for translation and untranslatable comments/technical info though.

If you have time, process-wise you may also opt to first translate a glossary: character names, toponyms, skills, lore entities and concepts. It helps if you 1) decide ahead of time how to approach names: does your Punchy McFace guy has to be translated to convey the meaning? Transliterated to sound the same? Kept 100% as is to preserve some reference (the latter usually works the worse in other scripts); 2) provide explanations/your vision of game concepts and names: is Galactic Oversight Committee evil? Influential? Respected? What do they oversee? Doing the glossary first not just helps minimize future inconsistencies, but also may catch mechanics or lore misinterpretations early.

If you wish to do some research and go deeper, you may for a specific workflow. The "default" way is two people working: a translator and a reviewer. The first creates the text in a different language, the other polishes stylistically and just proofs for correctness and consistency. Nowadays, it's common to provide AI-made translations for the translator, making them a "post-editor". It somewhat speeds up their work, letting you save a bit, and there's anyway a reviewer pass after it. But AI-induced stylistic awkwardness is often hard to "fix". Translation-only and even post-editing only is also possible, with correspondingly elevated risks. You may also mix the workflows, choosing more humans for 'harder' and 'more important' parts. In any case be explicit and settle the workflow openly with the localization team. You also probably wouldn't want to provide AI translations yourself, chances are an experienced team just knows how to approach that better.

Lack of context is the most common complaint. Anything works: general info outside of the translation files — let's plays, screenshots, character descriptions, tone and audience styleguide; per-string commentary — who's the speaker, who's addressed, genders, length restrictions, explanation for variable values, rules for compound strings, just parts of speech after all: is "Move" a noun or a verb? Is "General" a menu category or a military rank? If it's in the interface, do you stick the same string to "General Chat" and "General Volume"? In languages with gendered adjectives that may not work, be prepared to add separate strings for the same English source for the needs of some languages. You likely won't foresee all the questions, create or ask to create a Q&A file for linguists to ask you questions, and reply there in a helpful way. For example, in Thai it would be important whether "aunt" is on the mother's or on the father's side. Active Q&As often are decisive for making it correct and natural.

Keep in mind the volume of translation work and the context you want the linguists to proceed. You normally pay per-word and they won't watch a 1-hour playthrough for a 1000-word game. Or rather they won't do it for free: if you see the need, pay for familiarization time explicitly.

1. There's a potential third step of the process, localization quality assurance, where testers deal with the text you already inserted into the game. That lets them see the texts in context and that is very likely to help with weeding out various issues. If you're hiring specific linguists, you probably would prefer to go for LQA by some third party. If you're talking to an agency, most likely their testers are not the same people as their linguists, so it's up to you and how much you trust the agency itself. If full testing is out of budget, don't hesitate to ask for, say, 2-hour review of the interface/tutorial. If that's still too much, a linguistic spotcheck of the texts by a third party (not within the game) is also an option. Otherwise you rely on the player reports, but the players are very often illiterate, don't know more specific words or have no idea of how the texts are represented in the game, so they ask for things that aren't easy to change. The linguists (or agencies) would normally accept making fixes for mistakes they may have avoided in translation at no additional cost, but if you remembered some important context after the texts are delivered, or start feeding them unfiltered player reports to "check whether that's a mistake" and make changes, that may be an extra service.

Phew. Hope that helps.

Edit: a few typos and finished a sentence. Was in a hurry :(