I have a 700r4 in my 77 k20 suburban, behind a mild built 355. This trans was purpose built for my big heavy truck.
I have towed many miles(moved 250 miles away when retired) loads were not over 3500lb. My boat is @ 5k it gets towed in 3rd never over 45mph.
Currently running only an external cooler. 67000 btu with its own fan. Truck only trans stays under 200° F. Towing light loads(dune buggy and single axle aluminium trailer) up 10% grade in 3rd and 2nd temp has climbed to 220.
all of that history was done with 4.88 gear ratio and 33" tires. Recently upped the tire size to 37s. Have one buggy tow since. Trip went well used 3rd gear for the few hills.
All told trans was done in late 2018, by a GM trans specialist shop in Pomona Ca. The Toy Shop. @ 30k miles on this trans.
Answers to your questions.
Yes D will automatically shift in to overdrive. Normally over 40mphs and part throttle.
If you can find Dexron III that is the correct oil for 700r4, if not Dexron VI is acceptable.
Throttle valve cable adustment is very very Important to the life of this trans. When you sevice the fluid, this is the best time to/ adjust the cable as you can see the cable lever ans tv plunger.
Second is cooling besure to get a large quality cooler, esp ifvyou bypass the rad.
Greg Ducato makes his living and has tremendous experience with automatic transmissions, Phoenix Transmission in Texas, weight what he says more than others. Including me
On your brake light switch there will 2 plugs. 1 is normally open, brake lamp circuit. The 2nd is normally closed,this Torque Converter Control(TCC), or lock up. Installing a toggle switch in 1 wire on the normally closed side will allow you to disable TCC.
I recently added a TCI vacuum switch to my TCC circuit. This switch is adusted to unlock my converter at @6" Hg engine vacuum. Unlocking allows the converter torque multiplication to assist,and for me @ 250-300 more rpm into power band.
You read about my trials, tribulations, and some solutions here
https://ck5.com/forums/threads/wess-burb-build-update-maintance.336847/