To answer all your questions about this;
Yes.
If block is bare, put blue on the area surrounding the chambers and bolt heads to block. Use a scribe and reach inside and scribe the heads all around the cylinder.
Remove head. Place head gasket to be used on head. Place bolts in the head gasket larger than necessary. Stick some 1/2 bolts in the gasket holding it in place so it can not move.
Now mark with scribe around the valve relieved sections of the head gasket. That is the maximum you will go when doing valve unshrouding.
Where the valve relief Extends past the cylinder wall where valve relief is it won';t do any good to cut head any farther back at that location. Unless you place head gasket on the block and also mark it where the valve reliefs are and grind those relief notches in the block. If you do be very careful and do not grind the notch too deep. If you do decide to grind notches in block only cut it for intake vlaves and not very deep. You will then need to debur where you cut the block in the cylinder wall area. Haven't done this in many years.
Esay way to cut the valve unshrouding reliefs is to get a flap wheel for sanding that is a little larger in outside diameter than the valve that cuts only on the outside diameter of the flap wheel. I say this because there are also flap wheels used on a disc style sanding disc that cut on the falt surface.; You want the type that cuts on the outside diameter.
As you sand with it at only the valve relief position, move it continously up and down and slightlyu side to side. Usually anytime I am sanding or grinding on a head i am constantly keeping the stone, sanding surface, cutter or grinding surface moving, usually in small circles. I keep better control by keeping the tool continously moving.
Possibly someone else will come by and tell you an easier or better way.
Ed