This is probably the oldest topic out there. In short:
1. Cycling shorts and jerseys work great, and you can wear MTB shorts, which are loose on the outside with a proper cycling liner, if you don't want to look like a superhero or have shorts on so form fitting that people can tell what religion you are. Though once you get past all the weirdness of owning your first pair, you won't look back.
2. Chamois cream is your friend. Apply liberally.
Good luck!