1) Yes you have to get the engineer to grade three.
2) It's much faster to get to grade three now because you're there the very first time you get to grade three on the first module.
The down side is that it takes a lot more materials to do engineering now!!!
If, however, you're interested in engineering every module to the top of grade five you'll spend fewer mats. That's the only time you spend fewer mats in this new system.
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With the old system, after I had all the engineers unlocked at grade 5, I was able to fully engineer a large ship from 0 to grade 5 in an evening. It's highly unlikely I could do that these days considering all the grade 5 mats which are required now.