You are severely overcomplicating this dude!

Put a textfield on the stage. Set it's type to Dynamic or Input depending on what you want.

Then in the Properties palette, click Embed. It will bring up a dialog that asks you what ranges you want to select. For what I usually use, all caps, lowercase, numerals, and punctuation are plenty. You are free to select all characters or any other ranges you want, just remember, the more characters you embed, the larger your file size of the finished swf will be.

That's it.

Also, to answer your question, yes, font embedding is necessary for numerous reasons.