Open the blank template & set it up with styles, views, margins, etc. as you want. While you're at it insert a text box, click in it & choose the font, size, color, etc. you want in the fonts panel or format bar. Resize the box if you want, set the amount of extra space in the wrap inspector, etc. You can do similar changes to inserted objects & tables. Delete each text box, object & table after you've set them. Now, save this document as a template & select that template as default in preferences. If you decide to make any changes to the template down the road, just Save As Template again with the same name & replace the previous version.
About the only thing you cant set a template to do is remember to show invisibles & the window position. It is possible to get a template to show invisibles when opened, if you want. Save this document as a document then, in the Finder, change the extension from .pages to .template & put it in your My Templates folder in HD > Users > (your account) > Library > Application Support > iWork > Pages > Templates > My Templates.
2. How do I get it to autocorrect thinngs like lowercase "i"?