David, Kirk's reply already answers your questions very well so my comments are just extra.
I almost have the exact same workflow as yours. The only difference being that I
only export NEFs to TIFF if I need to perform some editing in Photoshop (e.g. dust removal). For the rest I keep only the NEF; the embedded full size JPG is more than adequate.
I generally don't use sidecar files but embed all the IPTC/XMP info in the NEFs directly. This works very well!
My settings differ from Kirk's, but basically only in the order in which the IPTC/XMP data is used.
I have sidecar file first, then embedded XMP, finally followed by embedded IPTC. I furthermore have it always write XMP to the sidecar (if it exists).
My reasoning for this is: I do all my IPTC editing with PM so the information is always kept in sync between the three sources. However, in case I use another program to update the data, it is likely to either update the info in the sidecar file or the XMP data, not the IPTC. This all depends on your software usage though, and is likely not to be too important as long as you know the impact of your choice
See attached screenshot for my preferences.
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