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Yes, you need to have the Basic form to use Stage 1s and Stage 2s. I think there are certain cards that bypass this to some extent (such as Holon Fossil), but they're few and far between. You can, however, evolve a Basic directly into a Stage 2 by using a Rare Candy.
For any deck, about a quarter of the deck should be devoted to energy- give or take. For a 60 card deck, include around 15 cards.