Welcome to the pile and the journey to enlightenment.
1) Dogs now nothing of pedigrees or bloodlines. While german shepherds are not commonly known as hunting dogs, they are known to have a good nose. That combined with a desire to hunt is about all you need. Most dogs will run a squirrel to tree on sight, but sniffing out a hot trail is another matter. Using the dog as a distraction is a great technique. when hunting with a partner, this technique has paid off many times. Squirrels will pay very close attention to the barking, bouncing fur ball and not so much to the slow and quietly moving person with the odd looking stick.
2) Here is where you need to check into your local game laws. Here in Missouri the code mentions nothing about baiting for small game. For deer it is definately forbidden. When I took my daughters for their hunter ed classes, the officers teaching the class told us that the wild life code is what they call a permissive code. Oddly, this means that if the code does not give you specific permission to do so, it"s illegal.
I admit I have been tempted to paint a few trees with peanut butter, but have no idea now long it might take for them to find it. Now if I did this in my yard I think it would be a matter of minutes.
Most squirrel hunters I've run into do not bother with a head net or balaclava. I have used them when bowhunting deer and found myself in the close company of several squirrels at once. It certainly won't reduce your odds for success, so I'd say try it. The thing to remember is the squirrels will pick up on movement alot faster than they will the shine from your face. Both are important. If the shine from your face gets you noticed, he may not head for the hills if you don't move. Once you get noticed, you will be under scrutiny until the next distraction, then it's anybodies guess wheither he'll look again later.
3) Skinning the squirrel is easiest done while the body is still warm, but involves alot of movement. I'd at least wait until you're ready to move on to another location. As far as spoilage, I've waited a few hours before skinning with no ill effects, but the hide didn't come off nearly as easy.
I've carried them by the tail, used a fish stringer ( the kind with a sharp spike on one end and a ring at the other) I ran that thru the rear leg between the bone and the tendon just above the ankle joint, or in a game bag made into the back of my hunting vest.
4) Generally the most activity will be from dawn until about 10 a.m. but squirrel don't wear watches. Weather and time of year can cause that to vary quite a bit. Movement sometimes picks up a little a little before sunset. Truely the best time to hunt is whenever you can get to the woods. Even mid afternoon can be productive. In after noon you may have to look sharp, but you may find them sunning themselves in a limb.
As far as cooking them, there's more ways than I can shake a stick at. Many say young squirrels are best for frying. Once they go in my freezer, I can't tell old from young, so they get cooked however I feel like.
The only small bones I'd worry about would be the rib cage. There is next to no meat on the rib section, so it usually gets pitched with the hide.
We have a pretty nice section on the main page of the site called Big58cals critter somethin' or another, I suggest you look it over for some really good how-to's for skinning, cleaning and butchering your game be it squirrel, deer or turkey. We have another section for wild game recipes that are really good. Check them out as well.
