Depends what you want from your character. Hit boxes, for example, can be useful if you're making an FPS and you want different animations, or different amounts of damage dealt for head shots, body shots, leg shots etc. But they're not necessary. Normals are a whole big can of worms, but yeah, they are important. If you're not familiar with what normals actually are, you'll probably want to do a bit of research into what they are and how they work. You can set the Animator to 'Show Normals' whith one of the buttons along the top, and you'll see a bunch of magenta lines sticking out of your model, basically (and hopefully someone will correct me if I'm explaining this wrong) they show the direction from which a polygon will be viewed, so they should be sticking out towards the viewer, not in away from the viewer. Normals effect lighting and in some cases a poly with the normal facing away from the camera will be culled and not show up at all. Fixing normals is a wee bit fiddly, but ultimately you will want to do it. Then there's normal maps, which can make a low poly model look like a high poly model, this is an ace thing, but something you would do in your modelling application, not in Dim3. Can't quite remember exactly what Prepare Model does, think it's for calculating the size of the bounding box the model occupies, for collisions etc.
Hope this helps, let me know if it's not making sense to you.