I think you have a good plan! I would just postpone the deletion of your Micro.blog hosted blog and do it as the last step. Here’s the web site verification page.
No, your timeline should be unaffected by this. If you want permalinks to continue to work, your new self-hosted blog should follow the same URL structure or have redirects in place. For example, here’s your latest timeline entry:
That entry will still remain once you delete your Micro.blog hosted blog. The entry links to the original post via the date. The original URL is https://bulletin.sherif.io/2022/10/10/finished-reading-listen.html. Your new self-hosted blog should have that same post on that URL or redirect to the new location. If not, people who see that post on the timeline and follow that link will end up on a 404 page.
You shouldn’t have to do anything except make sure your self-hosted blog continues to serve your blog posts on the same URL as before.
No, your blog and timeline/Micro.blog profile are separate things. You will follow the same people as before, and those following you will continue doing so. Again, the timeline is unaffected by where you decide to host your blog. It is just showing entries from one or more RSS feeds.