Yes it's necessary to DC the negative battery terminal to prevent potential arc-ing and damage to sensitive electrical / electronic components...

No, your alarm should not go off unless you had the car locked-up and alarm activated when you started working on it...

Make sure the car is unlocked alarm off with your key fob...

There is an anti-theft program and anti-tow program in the car and the module is adjacent to the ECU board ... it's called SKREEM it work in conjunction with the PCM & BCM...

Explain exactly what your car is doing / not doing...