Everyone on the island benefits from your upgraded farm, as long as they have conquered that farm. So yes, you are helping everybody. So when looking at which farm you want to take, a good idea is to start by the ones that have the highest upgrade level (as long as they do the trades you are interested in).
Typically players will conquer 5 to 7 farms on an island, leaving at least one unconquered as an easy way to kill off unneeded troops (when you want to switch your city's specialty from defending to attacking for example). Also to conquer your 8th village you are just losing too many troops to make it worthwhile, until much later towards the end of the game (and world wonder filling).
For a good portion of the game, 5 villages is pretty good. And for their upgrade level, up to level 5 is pretty good, after that it also is a bit diminishing returns as you have to feed them so much to get to that level. Towards the end of the game it makes sense, also towards the end other cities on the island will be big too, and it is the reverse that is happening when you become a big player: you start to have a lot more resources than you can use.
But if you say you are just starting, remember also that there is a fair chance that you will lose that city at some point, even if you are a good player, so don't get too attached to a specific one. In this game the strength that really matters is that of your alliance.
To conquer the next village: you need to have at least the number of pop it says (blue bar) as trained units, and you also need to have the correct units so that you actually kill the village defenders. To know which units: use the simulator (in the agora). For the 7th village if I recall you can use 140 slingers. If it says you need to have at least 600 pop, that means in that city you need to have at least 600 soldiers trained - but note that the units used in boats count as well, for their pop value (a (slow or fast) transport boat for example is 5 or 7 soldiers). That is just a minimum you need to have.
units needed to conquer the villages: to get the best ratio killed: I think it is something like that
1st village: any soldier
2nd: 1 slinger
3rd: 3 slingers
4th: 7 slingers
5th: 31 hops (or chariots, or any sharp)
6th: 12 horses (can also use envoys, anything with blunt)
7th: 140 slingers?
8th: 300 slingers?