1) Yes it publishes them but they won't refresh unless you add a scheduled refresh on the extract--most of the info you need is here: http://kb.tableausoftware.com/articles/knowledgebase/schedule-extract-updates-60
2) It will refresh all data in the extract files embedded within the workbook. Yes, just worry about scheduling a refresh on that workbook if you aren't using published data sources on Server.
3) It depends, but typically you'll want to include external files. More info here (toward the bottom)--if you don't choose to include them, other people may not see images or other files embedded in the workbook: http://kb.tableausoftware.com/articles/knowledgebase/schedule-extract-updates-60
Thanks regarding 3) If I select to include external files and then schedule the packaged workbook to refresh, will that external file refresh too?
If it is part of the data source/extract then yes. I don't work with Excel files much but if you're referring to an Excel file that you've created an extract from, then scheduling refreshes on server will update the data from the excel file at the scheduled time of the refresh.