"kochać się" can mean "make love", but also simpler "love each other". Or rather the other way round, "love each other" is rather the basic translation.
Yes, a lot closer ;) "si" before a vovel make the Ś sound, which is a palatalized S, as you probably know. Not a "Sh". But as this seems to be a difficult thing for foreigners to perceive... if you can't pronounce Ś, go with SZ, I guess.
You can do that (as always), but it's not like it's more probable here, it still sounds like contrasting (You do not love yourself but I do love myself).
"Ja" would be used for exemple in such statement: "Ula kocha mnie. Ja kocham siebie." The "ja" would emphasize the opposition of her (Ula's) feelings and mine. To show that her feelinga are not consistent with mine.