Is this required for brake pad replacement? I've read that some of the brake fluid from the resevoir needs to be siphoned out. Then a clamp is used to push apart the pistons. Can someone confirm this?

Tool is about 8 bucks... worth it if you change brakes often. You could use a large C-Clamp if you already have one.

The fluid level on the brake master cylinder reservoir will go up because you are pushing the pistons back into the caliper.... so it'll depend how worn your pads were and what level you had the brake fluid before the brake job.