For the domain, you can just point the nameservers to the ones we provide you after web hosting purchase. The company you bought it from should be able to assist you with it too, or we can if you would like, if you provide your domain registration account info. It just involves entering the nameservers we provide into your account, and then it gets connected to your new web hosting.
Registrars do not allow transferring domain names right after registration, but if you would like at a later time you can do so after 60 days have passed; but, it's not necessary to transfer to connect your domain name to your web hosting account, as long as you did a typical domain name registration.
The 1gb package would be fine to start with, and then you can upgrade as necessary.