Hey Duke, you're getting lots of good advice so far. Lots of these guys know more than me about offset fire management. You are on the right track!
Your questions about different woods: first, I sympathize with the challenges of finding a source for good smoking woods in your area. That's not a problem where I live - we have an abundance of oak, hickory, pecan, and fruit woods here. I can also appreciate your doubts about how different woods will affect the flavor - and aroma - of your cook. I know that there are many guys who claim they detect the different nuances of flavor from different woods, and I don't dispute them...but to be honest, I really can't tell much difference between one wood type and another (with one exception - mesquite produces a pretty strong and unique smoke flavor that I can tell the difference). I generally burn either hickory or pecan wood - mostly because they're in such ample supply around me.
Here's a decent article I found on different smoking woods. The author is a little subjective, but covers most common smoking woods pretty well...including woods you shouldn't cook with.
Part I
The debate over what is the best wood for smoking meat has been argued for years. We use a secret blend for our BBQ in the only outdoor smoker in AA County!
www.chadsbbq.com
Part 2
As a continuation of our previous blog, we're rounding up more wood-meat combinations to try. Check out the 9 best wood for smoking meat below.
www.chadsbbq.com
Fire management in an offset smoker is - IMHO - much more of an art than a science. It seems that every pit is different, and takes lots of time, practice and experience to master. Like you, my first smoker was a cheap offset (COS) from a big box store. Many COS pits are a challenge in fire management and temperature control, because they leak air from places they shouldn't. It seems you are already addressing that with your pit...you mentioned you've already sealed up some air leaks, so you're already ahead of the curve. IMHO, in most offsets, the fire - and the cooking temperature - can be controlled in 2 ways: by adjusting your dampers to control oxygen to the fire; and by building a smaller or bigger fire in the firebox. Many experienced cooks have mastered the 2nd thing - controlling your temps with the size of your fire. But again - it's an art that requires experimenting, time, and experience to master.
The question of using charcoal to get a bed of coals started: Every pit master has his or her own system, and what works best for them. IMO, I don't think there is a wrong way of doing it - it's just doing what works best for YOU. For me, I like to start with a chimney-full of red-hot lump charcoal, then put 2 or 3 medium-small splits on that coal bed. Others like to start with several small splits in the firebox, and use a propane log lighter or weed burner to light them. But again, whatever works best for a person is what they should do. This is a trial-and-error step that you should just experiment with to see what works for you.
Happy smoking!
Red