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As I pointed out the paragraph settings are different for the fist paragraph, in yours the first paragraph is <p> </p> so you do not see the first paragraph differently indented.
h1 has a style in the css that is the correct place to set everything you need, it is then in one place if you need to change it you only need to change it once not every place you used it in the book.
Yes h1 will help with formatting and toc creation, so will h2 and h3 which will give you variety of styles, there is so much more you can do with styles.
As for boldening the first two words, it does not cause a problem, it is just something I do not like, it is all personal preferences, if you like it that way then go with it, it might be an idea to set a style for it though. The first thing I do with any ebook before I read it is remove the toc, I find it pointless in a novel, and remove what I think is distracting formatting, while I am at it I usually correct spelling errors. You have some of those to, but I did not bother to much about them as you were asking for formatting tips.
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