1) Neither. You visualize it and put yourself in it. VILD is a dream thats pretty much created by you.

2) If your body's tired: good. Your mind is tired: bad. WBTB helps but isn't essential

4) you have to immerse yourself completely in the dream world. Not just sight, but the other senses such as touch. For a VILD, weak imagery is nothing. You have to drive the dream home.