line it is so it doesent hit the sub i would think. It is not needed but is useful for space saving because it can make a smaller box "feel" like a bigger one to fit the sub specs
Without stuffing, an enclosure will sound boxy/mechanical. This means that the walls will resonate/vibrate and add to the sound. This changes the sound, for worse. Yes worse. Just because it adds volume doesnt mean it is better. Hollow, boxy, boomy sound is something to stay away from.
When you add "lining" (not to be misinterpreted as stuffing) it helps reduce the hollow hall effect, or boxy sound, but it will not do what stuffing does.
Stuffing is loose filling that adds opposition to the driver by making the air pressure change and thus a larger wavelength may be created in a smaller enclosure. Larger wavelengths result in lower bass. Although you get extended lower range it is at the cost of efficiency, so it will play a lower note, but not as loud.
The more stuffing you put in the box, the higher the air pressure will be. Sometimes in an empty enclosure the pressure will bounce back into the woofers cone and cause distortion. When lining/stuffing is present, it will help minimize rebound.
Yes, polly-fill. Just insert itside the box. You will need more than one bag. Fill the entire box with polly-fill except leave a little breathing room for the woofer (keep at least 3" clearance). The stuffing should be dense enough to stand up on its own.
For sealed boxes sometimes they recomend stuffed tight. Make sure that it bounces back after you put gentle pressure on it (like a pillow). That should make your suspension very crisp.