'Are there any drawbacks to using another country's ship yard to build my legacy fleet?' For initial fleet building? No. Building from another yard during the actual game progression limits the chances of the RNG dock size improvement events, but gains the chance to learn something about foreign tech.
'How much does the -1 quality on the 12" guns affect their effectiveness?' Quite a bit, in the early game -1 Qual guns are barely better than smaller 0 Qual guns. The 13" -2 some nations get are garbage to the point they aren't worth carrying. High research in guns early on is normally a good investment. But to begin with you don't have much choice but to put up with -1!
'What number and class of ships should I try to include in my legacy fleet?' Well that is entirely personal opinion and dependent on fleet size selection... Go with what you fancy, I tend to avoid light cruisers, others swear by them, it's all opinion. If you start a new game but don't select 'manual build of legacy fleet' you can see the sort of composition the AI will use, you can then quit out.
'Should I save as much as possible to spend on new ships and the technology when they become available?' keep in mind that in general as soon as a ship is launched it is obsolete thanks to tech progress, unless you play on low research rates. So don't worry about saving too much, and if you do save a lot of money the politicians will reduce your budget as clearly it's not required! Half of your total budget I think?
'Is it worth moving any ships to South-east Asia to have a small presence there? (I am thinking of the future possibility of Oil in area)' Germany's possessions in SE Asia aren't really oil locations, NE Asia is more likely. You don't need ships in that region for the oil, once you have a possession in an oil area it is considered sufficient to build oil powered ships once you have the tech. Eventually oil is considered so available that all nations have access regardless.
'I am going to try and avoid conflict as long as I can until new technologies are researched, any tips on how to keep the peace for the first few years most welcome.' To keep tensions low don't station ships in foreign waters, don't expand bases in other areas, keep spy activity low or off and use the pop-up RNG to lower it when possible. Keep in mind that each is a trade off... No ships on foreign waters leaves your bases their open to invasions, small bases can't support large fleets if combat does break out, low spy activity keeps you blind to AI fleet construction and removes the chance of 'borrowing' tech, and low tension levels means less money!
There are many schools of thought and opinions on many areas, try various things out!
Many thanks for the reply sir, very much appreciated.