You can let it grow this season without topping it but next season you can top it at the height you intend to keep it. If you're concerned that it won't form branches below the current top you can take off about six inches from the top at about tight cluster to bloom. This will encourage lower branching, but you'll want about 4' between tier scaffolds that are similarly oriented direction-wise, unless it's on something less vigorous than M7.

planting a seedling insures a 99% chance of inferior fruit. Quality fruit trees are all grafted to insure a clone of the mother tree. You can get a healthy/nice tree, however. Let the main shoot (trunk) develop to at least 6-10 inches tall...and slowly introduce to direct and mild sunlight.

I'd wait until they start really growing before repotting. Usually by early June they should get going. Then the chance of overwatering (or getting too much rainfall) is much less. However, if you are keeping them in a greenhouse or very warm and bright place, and if they are currently in growth, you could probably repot any time. Once they pick up speed in their growth, I'd move them up to a pot at least a foot in diameter.

The tree is too young to produce fruit. Especially being moved and planted (shock). It will take another year or two, possibly even more to start seeing fruit. You could plant it in a container but it will require quite a bit more maintenance. You will need to repot every few years and then, root prune the tree once the pot gets large enough. You will also need to prune the branches to stay small, so the canopy doesn't overbalance the root system. I assume it's a semi dwarf or standard tree which is why the nursery told you not to pot it? If it's not self fruitful, you will need another apple tree to pollinate it. You will need to research which trees are good pollinators for that variety.