I did not twist stitches when I picked up along the bottom, and it turned out great, so I don't think that's really critical. The felting part can take a while, depending on the yarn you use (I used Noro Kureyon and felted it 3 times throught the wash cycle!). But definitely make it bigger. I was slightly sad at how small it turned out. More like a purse, less like a tote.
I'm JamOKnit on Ravelry.