Yes....The seat will need to come down if you don't properly compensate (because the pedal is now lower at the bottom of the stroke). If you understand anything about how moving a seat forward will decrease distance to pedals then you will understand how you can now raise the saddle.

If the longer crank forces the knee to bend more at the top and the hip angle to become more narrow then you will lose power.

I don't know why you think moving the seat forward will make you lose power (especially with longer crank)? It will change the positioning on the bike though (definitely)

P.S. Every short legged person riding a small bike already moves the seat forward (they may not know this) becasue their frame does this for them through the crazy steep seat tube angle. Steep seat tube angles position seat forward.

For me (36" inseam), a measly 1 degree change in seat tube angle equals a whopping 1.5 cm change in the fore/aft of the seat. Most short legged folks are riding bikes with as much a 4 degrees steeper seat tube angles than I ride. That's a huge relative difference and explains how they get away with using "proportionally long cranks"