Regarding 2, remember that you're looking at a turnaround time of hours to try running your program, unless you were in a special situation. Anytime punch cards are involved, response time goes from seconds to minutes or hours.

"Development" would be sitting down, writing your program on sheets of paper (marked out to 80 columns so you know how many characters you get). Then either you'd key it yourself, or you'd send it off to be keyed onto cards. I'm not really familiar with the 390, but that's typically how things would work on a punched-card (i.e. batch) system.