To answer those questions I don't think there's a better place to start than with the angels' proclamation.
"Fear not! For behold, I bring you good news of a great joy that shall be to all the people. For unto you is born this day in the city of David a Savior which is Christ, the Lord."
We live so much of our lives in fear. If we are not afflicted with fears for our next meal or our physical health, we worry that people won't like us, that the stock market will crash, that something somehow will go wrong. Plus each of us has a whole collection of fears leftover from our past -- fears that are rooted in old hurts and old judgments. We begin to isolate ourselves like Ebenezer Scrooge, building walls of indifference or bigotry or self-sufficiency. It takes a ghost showing up in the night to teach Scrooge that those defenses are just links in the chain that binds him.
But the angel declares, "Fear not!" It is the most common command from God in the Bible. Partly, I suppose, because when God shows up we're naturally terrified, especially if this is a new experience. I had a great conversation a few days before Christmas with a man who carries a Bible with him wherever he goes, but he's afraid to read it. He wants to get right with God but the idea of God actually speaking to him is a little too much.
The angel doesn't stop with a simple command, but gives background for why we don't need to be afraid. This Messiah is good news, contrary to the religion some have made Christianity to be that is full of "thou-shalt-not's" and contests to see who can be the holiest. He is not a fearful king but a baby laid in a manger. He is Savior. He is the heir of David, born in David's hometown.
Whatever fears plague you these in-between days, a child has been born for you. Wonderful Counselor, Mighty God, Everlasting Father, Prince of Peace (see Isaiah 9:2-7) -- he is sufficient for all your fears and all your hopes. When the carol says, "The hopes and fears of all the years are met in thee tonight" the key word is "met." It means not just "encountered" but "answered." Jesus is God's answer, God's solution, to the hopes and fears of this world. He is not sent to make us cower in fear but to be our Savior.
So what do we do now? If we are wise, like the shepherds we drop what we're doing and run to Jesus. "Let us go to Bethlehem and see this thing which has happened, which the Lord has made known to us!"
O come, let us adore him, Christ the Lord!