Matter of preference...I always start from the top and work down, that way I'm not kneeling on the fresh work. Plus by the time I'm nearing the end of the install...I don't have all those steps to go up and down
PL Premium would be a more suitable glue.
I would say you have the right idea,(painting the risers first), that way you don't have to "cut them in". You'll end up with nice clean lines. I would just wait till the paint is fully cured, and cover them with paper and blue painters tape.
If you have any movement on a tred....wait till the glue is cured. But it sounds like your nailing also ,(which is a good idea), especially with 3/4 strip. You should be o.k sanding right away. But I'll bet by the time your done installing it...the glue will be cured anyway.
Undercutting ??
Are you talking about "relief cutting" the back of the boards. If so, not necessary on steps.