1-2, 5. No. The elderly can start using at the beginning of the year, even the elderly will not become 70 until the end of the year. See here:
http://www.hcv.gov.hk/tc/pub_hcv_faq_vr.htm (FAQ Question 10)
3-4. No application is needed. See here:
http://www.hcv.gov.hk/tc/pub_hcv_faq_vr.htm (FAQ Question 12)