Donny, off the top of my head.
My method:
1-Set up the song you have selected:
1-the style,
2-instruments in the style and tempo.
3-the STS of your choice.
4-The pads
5-Key transposition.
6-If you have lyric save them simple text and attach them to the song you are working on.

About the Performance; there are 3 right hand sounds – and one left, plus the editing that can be done. Now this is a lot of work just for one song but when it is done you have Donny’s creation. A short cut I am using is to create a group of performances that I can call on when I am playing live or when I am working with Song Book. Example: Piano Rt1 vibes Rt2 guitar Rt3 left Piano. Set the octaves, volumes and possible EQ for each one. Set the type of ensemble I want and which parts will receive it, and the intensity.
Most of the factory Performances are good but I needed some that were me. I started with a page of eight, always ready to make changes in them as I learned more about the keyboard.

Now when I am adding a new song in song book I can use some of the performances I created or what the factory created saving a lot of repetitive work. To answer your question; no you do not have to use performance with song book, but it makes life easier. With Korg there is always more to learn; I imagine that this time next year my song book will be much better than it is now.

I am now starting to add some midi files with their lyrics in song book. My next step is to add some Mp3s. Given time and some work the keyboard will be able to do a more in depth job that none of my other keyboards I have owned.

I use my laptop for lists of songs to match the venue. The same song can be used in different lists; each song has a number, a sort of code; Scott Yee is great with this kind of thinking.
Examples using Genre. in song book: A1 = 30’s and 40’s up. A2 = the same in medium tempo A3- the same in ballads. ZZ = Ethnic music. WW = Polkas. For music sets I use different codes. Your imagination will not be limited with song book.

Hope this helps, John C.

PS, Keep in mind I am new to Korg, the keyboard is amazing.