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I work from second (or better yet) final pages. It's always better to delay the indexing process until the second set of page proofs are ready. Sometimes too much reflows when working from first pages.
An indexable page is any page that must be read to determine if there's anything indexable on it.
In general, front matter is not indexed - not the preface or forward, not the acknowledgements. Introductions are indexable if they add to the subject matter discussed in the book.
Glossaries and bibliographies are usually not indexed. There can be circumstances where any of these parts of the book may be indexed.
Footnotes or endnotes may or may not be indexed.
Non-textual material such as illustrations, boxes, figures, and tables may be indexed.
Locators are usually, but not always, page numbers. In The Chicago Manual of Style the locators are a chapter number followed by a period followed by the paragraph number such as "18.109." URL addresses are another example of locators in websites, but most locators for books are page numbers.
Page numbers can be present in full, like this: 14-18, 243-247. Or they can be elided following Chicago or another style, like this for example: 100-104, 163-66, 193-209, 203-6, 209-212.
Volume numbers can be part of the locator as, for instance, II:14. Usually an en dash separates page ranges, but I can use a hyphen (if you prefer) or any other character you specify.
Why use them and where to put them? First, there's no point in having a cross reference to a subject if there are fewer than five mentions of it in various places. In that instance, "double-posting" makes better sense. Why send the reader somewhere else, when the necessary locators don't take up a lot of space?
Cross references have many formatting options. Most often see and see also are italicized, but not always. Most often the initial letter is capitalized, but not always. They can be placed immediately following the main entry before or after any page numbers associated with it, or as the last subentry. The placement after the last subentry makes sense in run-in indexes, but not in intended indexes. For indented index placing the cross reference after the main entry works well. Any changes in placement are simple to implement.
If there are any length limits for the index, it's imperative to know that at the outset. There are many ways to tighten up an index, some of which include using the run-in versus the indented format.
Indented indexes are easier to read than run-in indexes. An example:
dogs
foxhound, 134-135
Great Dane, 51-54
Setter, 239-241
Run-in index example:
Brooks, Henry, Jr., 167; arrives in Virginia, 181, 182-183; death of, 215; (J.) Glover and, 171; Ingle and, 214; Looking Glass and, 183, 186; surrenders to Ingle's men, 189; tobacco trade and, 169-170
Although run-in indexes are somewhat shorter than indented indexes, they often don't save a tremendous amount of space.
A sub-subentry is a third level in an index. They are not usually used in scholarly books with run-in indexes. Sub-subentries can be very helpful in some indented indexes but can be tricky to typeset. I am happy to proofread any typeset index I have written to make sure the indentations come out right. When indentations are lost, the index doesn't make sense since it appears to not be in alphabetical order.
There are two major methods for sorting the entries of an index, "word-by-word" which is often used in library catalogs and encyclopedias, and "letter-by-letter" which is often used in dictionaries. Either is a setting in my indexing software. You just need to indicate which style you (or your publisher) prefer.