One of the hallmarks of Vodyani... physiology is the need to consume the essence of other beings. Does that include Iysander? It would be a cruel irony if he had to feed even in secret, but at no point is this implied.

Also, unrelated unpopular opinion: The little we hear about the lost makes them too "nice." I'm already temperamentally on the side of the Defenders, but sometimes I get the sense that my side doesn't get any help bolstering the moral claim against Iysander's plans. (In the trailer, remember, it was implied that the Heretic dreamed of galactic genocide!)

Not necessarily, no. While Essence is needed to create Vodyani, it isn't required to keep Cloth functional.

I don't think Isyander words should be interpreted literally, I don't think he desires to replace one genocide with another. He wishes for rollback, resurrecting Lost. He knows he'll need enormous amounts of Dust for that and that his plans will haul in entire galaxy in war.