That is the whole point of the process. Staying below the critical temperature means the microstructure is left alone: a hardened part stays hard, a normalised part keeps its grain. Only the internal stress relaxes. If a cycle went above critical it would be annealing or normalising, and the part would come back with different properties than it went in with.
After welding, particularly on heavy fabrications and anything that will be machined to close tolerance afterwards. After rough machining, before the finishing cuts, so the part moves in the furnace rather than on the machine. And on castings that will be line-bored or ground, where stress released later shows up as a dimension that has drifted.
Fabrications up to six metres go into the gas-fired box furnaces. Because stress relieving runs cooler than a hardening cycle, it is often the least disruptive operation to add to a job already booked in for something else.

No, provided the stress relieving temperature stays below the tempering temperature the part already saw. Tell us the hardness that must be retained and the cycle is set beneath it.
Usually between roughing and finishing. That way the part does its moving in the furnace, and the finishing cuts bring it to the final dimension afterwards.
Yes, and it is one of the more common reasons work arrives here. Send the fabrication drawing with the weld detail.