Yes, you double space.
Going old school… learn how it was done back in the day. You can find old textbooks and submission guides. The same is true for typewriters, so you will find guidelines up to just a few years ago to be useful. For the marks used to indicate corrections, see this page. It's surprisingly hard to find this nowadays, but I had luck using the Google search
how to mark corrections in a manuscript. And, use a bright contrasting color! Besides the special marks and having room to write more words to be inserted, you get the idea of how much room you need to do that.
Number pages within a set, not the entire book. Label each page of the set with the chapter ID and draft info. For example, the packet of pages will all be A27, so pages will be A27-1, A27-2, A27-3, etc. Often sketches will be smaller than chapters and not placed yet, but this packet needs a “file name”. So use date and number suffix so you don't have to think about making up something unique. It’s also a good idea to note the total number of pages on the first page at least, so when you are done update it to read A27-1 (of 6) for example.
I’m thinking that the amount of writing in a packet, what you sit down and write as one unit of new work, is like a scene in a story, or some notes for the character. So some packets are assembled into a draft chapter and other packets are your own reference. Point is, every time you write something, give that a unique ID. If it doesn’t fit on one page, number the pages but only consider that one packet — don’t try to number across a chapter-in-progress, for example.
Write single sided only, if you didn't already know that. Single sided prevents marks from showing through, but high quality paper and some marking technologies tolerate 2-sided better. Single sided is better for laying out papers later, as you don’t have half hidden. You can also use the blank back for notes that don’t fit, and this is handy for marking students' work to hand back; but you also use new sheets for this by labeling the insertion point with a circled number.
Use generous margins. You might also take ideas from note-taking formats, and leave a few inches too the side for notes to add later! Especially for “sketches” and rough ideas.
When I was re-learning penmanship for good handwriting, I used good fountain pens and also created my own custom lined paper. This was the size I liked and the mid-line (x-height) adjusted to my liking. The link has more of my notes about handwriting on paper.
Using packets of standard sized writing paper is suitable for writing that will consume a good vraction of at least one page, up to many pages. But for organizing materials for essays, I was taught to use 3×5-inch index cards. Each contains a short fact or a couple of sentences. This idea has returned with the guise of “Agile” management! So you can now find these index cards in a variety of colors. And you also find sticky-note pads with 4×6 or 5×7-inch pages, that can be arranged using a wall to stick them on. These smaller pieces don't need double spacing — any rework just has you copy out a fresh card.