Hello TinaMichael,
Thank you for visiting this thread. I will do my utmost to answer your queries.
1. Online application is best! VFS people can sometimes ask you for things your do not really require, but the online application based on the online questionnaire for the kind of permit you want will generate a proper checklist for your to work with. It's faster, more convenient, does not require initial submission of your passport, meaning you can still travel while waiting for a decision from the embassy instead of being held to ransom.. its just much better in my own opinion, but people have preferences.
2. Medical examination can be done upfront or when requested by the embassy. Based on the things going on now, I would suggest you do your medicals upfront, so that if the VO is happy with your application, he/she will not need to now request for a medical report because it is already available, so they will just go ahead and issue your permit. The downside is that it is more expensive than if you do it when requested by the embassy, and also could be a waste of money if your permit is refused. Normally, if you did not do an upfront and the visa officer refuses your application, he/she will not ask for a medical report to be done.
All the best.
Omofar