Welcome to the forum. No need to apologize about all the questions. They are all good questions.
I'll try to answer them the best I can.
Firstly how much gravel should be in the bottom of a tank?
If you have an undergravel filter (UGF) then I would keep about 3" of gravel in. If not, I would keep it 2" or below. Having a UGF with cichlids is usually not a good idea since they dig so much and expose the plates. This makes the water take the path of least resistence rendering the rest of the UGF almost useless since the beneficial bacteira needs that water flow for oxygen with which they need to thrive.
I've heard it's not good and not necessary is this true?
It's fine to have gravel or go without. It's personal preference. Some use sand, even with cichlids, but I am afraid to try for fear of it getting into my filters. You could also leave it bare as quite a few people do with good success.
Secondly...I have 3 Oscars....only babies (3 inches) they seem to do fine together in the tank.....it's just everywhere I've read it says either only have one or a lot.....I'm guessing there are some general rules but the main rule is, is that if it works, you can do it so
You'll read a lot of different opinions from a lot of different people based on their experience. Sometimes things said that can never work, does once in a while. It all depends on each individual fish as they are all different even within a given species. When I reply in here, I only use general rules because of that.
Oscars, compared to most New World cichlids, are relatively tame and non-aggressive. They will eat anything that can fit into their mouths though, as almost all fish will. Within a tank big enough and with good filtration and husbandry skills, 3 Oscars should work fine. I would recommend at least a once a week gravel clean/water change though with 3 of those messy guys in there.
I've had mixed advice about flakes and pellets...at this size should they eat flakes or pellets?
Even at a real small size they can eat crushed flakes. What size are they? If they are a couple inches then flake food, frozen brine shrimp, bloodworms etc. should be readily accepted by them.
I have an external filter, which can provide a lot of water movement...seems to be excessive .....do they like this or should I tone it down a bit?
Hard to say for sure since I can't see the turbidity of the water. If they look like they are staying away from that particular area or are hiding behind things from it, then it's probably excessive. As they get older they will like to play in the current, but not as much as juvies. Depending on what you have, you can get a spray bar for your filter.
What external filter do you have?
What size tank and do you have any other filtration set up?