You need RXTools decryption function to make XORpads for your 3DS ROMs, so you can convert them into a CIA file. Or you can use other apps like Decrypt9 to do that if you decide against RXTools to do the job.
You can play with 9.5 emuNAND online, but you would have to get the game updates as CIA from a different source, because you can only get them from the eShop which you can access from 9.5 anymore.
But afaik there is this Multi Free tool or something which allows you to access the eShop from a 9.5 emuNAND??? You would have to check on that.
Nope...for CFW users CIA files are the only format to play 3DS games. .3ds files are for Gateway 3DS and/or Sky3DS(+).
Regards,
iCEQB