Should I have played 1 and 2 first? I kinda feel like I'm missing part of the story.

[teeny, tiny spoiler] Are there multiple ways to get Fred in the party? Can I get him in chapter 1? Can I get him at ALL? I played Geddoe first, then Chris, and I thought that if I had fought Borus during the former's first chapter, I might've gotten Fred when Chris and Borus met him in their first chapter.
God, I'm so confused.

Gamefaqs has the answers to your question. But, in short, Fred joins during Chris' chapter 3.

As far as understanding the game, Suikoden III can be played without having played the prior games. You won't understand all the nuances of the storyline though. If you want to catch up, go to Suikosource and browse the site there. It has A LOT of information that will help you catch up.

You won't understand everything, but the series is designed to keep the players in the dark revealing bit-by-bit info on the Suikoden universe as a whole with each game. Because of this the series could easily stretch for as many games as Konami wants.

Suikoden roxxorz, I would suggest playing them and finding copys of the story based ones that were released only in japan(their plot is up on suikosource, but thats not as fun as playing the games... in japanese.. unable to understand whats going on.).