You'll find that you need to wash wool much less frequently than today's plastic clothing. Wool does not pick up much odor. When you do wash it, just wash by hand in a sink of COLD water - or it can shrink to the size of doll clothes. I like to use just a little Ivory Snow liquid detergent (you can still find it, but you may have to search stores a bit) it's even milder than Woolite. Rinse in clean COLD water a couple times to remove all soap. Then gently wring out the jersey and lay it flat to dry so it will retain its shape. I use a (non-rusting) window screen lying across my bath tub to hasten drying.

I have some jerseys which I'd kept in storage at my parent's house since the late 70s and then re-discovered a few years ago. Some are fine, but others were perforated by moths. So, keep it in mothballs (or whatever is used these days) if you're storing it for a while. Washing the jersey can soften it a bit ... but there are limitations.

The scratchiness is due to the coarseness of the standard old wool which was typically used. Marino wool does not itch because the hairs are finer than your skin can feel. Merino wool is considered "fine", around 22 microns thick, and the average persons "itch threshold" is around 28 microns; "coarse" wool is 30 microns or thicker. [... That's something I remember reading in the Rivendell Reader a few years back]. Personally, when I'm out riding the initial itch seems to disappear. Maybe I'm just otherwise distracted, or maybe the wool is just softening a bit from any moisture my body is releasing after a few miles of pedaling.