LakeTrout...
There are many methods to raise queen cells, and I think it depends on your goals and location and management style to determine which one works best for you. Just be sure to have fun with it all, I think it's the most interesting part of all the parts of beekeeping to undertake.
OK, now I've not used an observation hive and I've not pulled out my grafted frame enough to know just exactly when the egg turns into a larva and they start giving the royal jelly. I believe it's at the end of the three day period, but I may be wrong by and hour or a few hours. Anyway, I figure egg for three days, and at the end of 3 days it turns into a larva and they start giving royal jelly at that time.
You do not want a 4 day old larva, you want a 1 day old larva. I have been taught in the past not to graft a larva that was younger than 12 hours, and anytime within the first 12 to 48 hours of age was good. I myself like the 12-36 hour larva. They have enough royal jelly to graft them more easily at the 24-36hr mark, and the queens turn out very nice. Now, that's age of larva, not the age of the time it was an egg and larva both added together. I'm just clarifying timing here to be sure.
No, it is not necessary to add royal jelly to the graft as you do it. It helps greatly if you feed the queen mother colony a day or two before grafting, as that helps insure a good amount of royal jelly surrounding the larva you need to graft. I've used the chinese grafting tool and like it because it picks up the royal jelly with the larva as you are grafting it and deposits it into your cell cups as you graft. That's very nice feature of using the chinese tool. Now, I've read that the nurse bees will remove any royal jelly you've added to the graft anyway and start with fresh, but the reason I like the royal jelly with the graft is it makes it much easier to pick up and then release the larva into the new cell cup. The larva will flow with the jelly. The royal jelly as you graft also helps keep the larva moist while you are doing the grafting which is very important.
Hope all this helps and best of luck to your adventures this year.