Unless it's been corrected, there is a bug in the Prelude>Premiere Pro work flow. I'd skip Prelude for now and just use PP.
How you organize your projects inside PP is up to you. There's no one 'best practice' for every editor. Do what works best for you. This you will learn from experience.
I do, however, recommend avoiding Dynamic Link to Encore and export out usable assets from PP, one for the web and one using the appropriate MPEG2-DVD preset.
I have never worked with subtitles, so I will defer to another on those questions.