You can play it in chords though but it gets real boring.
I have played this song on my performance, using only chords. You play some variations on chords. You grab a basic D, then let go of some finger when you stroke it, grab another note (still in D) and stroke it again.
This sounds all ****ed up I know but it does is the correct way to play it.
As for me: When I started to play the guitar, I didnt knew any chords, I just knew how they sounded but I couldnt name them.
N.E.M was accualy my first song to (try to) play, well you guys know when you play guitar for 3 months, you cant call playing guitar real 'playing' and 'learning' a song is what you do when you can play it right away.
But the chords maked all sence to me. You you grab a basic chords, then make variations on it. Some of them have names, Im not into naming chords, just know how to make them sound.
And you dont stroke these chords, you fingerpick them (You can stroke them but as I said before it gets boring)
Im told by a lot of people wow you play that song the hard way! I was like: is there a hard or easy way then? :)
So your question: It does matter that you know which chords are used, because you make variations based on the chord (and they clearly sound like the chords to me)
as for the second: Your fingersettings are all up to you.
Just play the way you feel comfortable, and it sounds the best. I have passed the comfortable-fase, im intending to play the way it sounds best. With a little practise that 'uncomfortable' way of playing becomes comfortable.
Of course theres a fingersetup for your frettinghand but that doesnt mean thats the only way to play ;)
Dont think, just play :)