"Win XP" is so out of date it's not funny. While I've seen the newer XP SP2 and XP SP3 setup sharing OK you need to know that the exact level of XP matters. I would never attempt to do a file/printer share with "XP".

1. and 2. If XP is up to date, SP3 and all that then it's on your LAN so the only software to add is your printer driver.

3. It's already secure to external hacking. It's not "on the internet". It's on your LAN and since the router drops inbound requests by default, there is no more changes needed.
Bob