I think the most common advice is to gradually build up your speed. It is easier to try and take a corner faster and faster until you reach your limit than to start out slamming into the walls and then trying to correct until you are able to stay on track.
It is important to use *all* of the track to get the best line. An example are run-off areas. The track is often expanded by a meter or so beyond white lines, and there is usually a reason for that. It means the fast cars were using that outside part of the track at that point to get maximum speed, so the track was later modified. Oschersleben is a good example of that. After watching some fast guys in practice mode, I noticed they were always using 100% of the run off areas at the corner exits.
Regarding graphical racing line: yes, the cones mark the start of where the driver you are watching started to brake. When the line is yellow, it means the replay car is not applying either brake or throttle. But with even a little bit of throttle, the line is green. And yes, you can adjust setup in time trials. But you should note that tyre temperatures and pressure is fixed at perfect values, so you should go into regular practice mode to tweak camber and pressure.
I concur about keeping in mind that you should do not always need to brake as late and hard as possible. Because as often as not, corner exit speed is as important as the speed on entry. Awareness of this is the #1 thing that's made me faster.
For finding braking points, you should memorize track markers. Like "brake right after the tree on the right, throttle when the car is pointing toward the building".