1. You have to level it out. Otherwise, you may hear squeaky noise later on. 2. You can use moisture barrier (basically thick plastic sheet). 3. Pouring self-leveling compound over the entire 1st floor may not be cost effective, especially if one side of the house has a little slope. To me, it is more a time efficiency kind of consideration. If you don't care about the cost, you can do it. Just follow Youtube videos. If you're highly sensitive to cost, you can actually spend some time to do spot fixes. After all, it is the relative flatness that matters and not the levelness.