You do need the washers - cut the heads off the old stretch bolts and use those washers.

The allen key is to make fitting the studs easier if the head is already in place on the block. Tighten the studs into the block finger tight only. The rear 2 studs should be wound into the block so they sit at the same height as the front 8 studs - you'll find that the rear 2 studs don't bottom out like the others.

Tighten the nuts over a few stages to about 85 lbft if using the proper ARP moly lube. If using engine oil, I think the figure is about 130lbft.