1a. First of all the best thing to do is familiarise yourself with the
Requirements for phpBB 3.3.
1b.Then read the upgrade guide section dealing with
Upgrading from 3.0 to 3.3 anything you don’t understand post back.
If you follow the above
to the letter you shouldn’t have any issues upgrading. Many users like to do a big upgrade like this offline then import the upgraded database from there using a local server on their pc’s, that’s a personal preference, see
Knowledge Base - Installing and Setting Up Your Own Web Server. Following the instructions as above you will have a full backup of your files and database just in case things go wrong, also see
Knowledge Base - Forum Backup Instructions.
2. phpBB is standalone and can sit in it’s own folder on the server if it’s sharing a url. Personally I know little to nothing about CMSs but I’ve no doubt there are users here that do, try searching here I’ll bet the question has been asked before. I encourage you to have a sift through the extensions forums as well as there may be something there to help.