in general and nail that is either A, may get wet or B in pressure treated lumber should be galvanized (or stainless for that matter)
The felt paper can be stapled on to the roof sheeting. You can go all out and get one of the synthetic roof underlayments if you are worried about leaks.
Roll roofing is not really ideal, no one seems to like it, but it works and will last a while if put on right. I would recommend 3 tab though it won't cost much more and is not that much harder to put on.
You can use almost anything to put the t111 on as long as it is an exterior fastener. Stainless siding nails,Galvanized nails, exterior screws work fine too
Keep the t-111 up and away from the ground, get the Z flashing for any horizontal seams it will be fine. There are 1000's of structures around here (western WA) that have T111 siding that are doing just fine. (Same goes for joist hangers)I am sitting in a 60 year old house with out joist hangers.
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Everyone is entitled to their own opinion, but not their own facts
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