It's all about biblatex. I only write using Word/docx if they force me to for publication, otherwise I use LaTeX for typesetting. It's vastly superior for serious publications, especially technical ones.
Happens all the time, depends on the paper. Often projects produce a lot of papers about a niche subject, so you're working through building that literature body.
I did some work In a field with a total of 6 papers over 30 years. It was niche as all get out. Did my second paper cite the first? You betcha. I literally cited every research paper ever done on the topic, including mine.
Recently I've actually been wondering how the hell researchers manage their citations for big projects, because a while back I started doing some research on the Cass Review, tripped on my own dick and accidentally ended up with 70-something disorganized citations (that I actually used) that were a pain in the ass to clean up.
I'm definitely checking out those first three software lol
I made good experiences with Zotero. Works well with LaTeX, a browser-plugin allows to add papers directly and you can annotate downloaded PDFs. Only problem I had were the paper-metadata, which often needed some fixing. Also that you cannot host your own server is a slight disadvantage.
+1 for Zotero and Biblatex.
You do need the "Better Bibtex"-Plugin though, or at least I highly recommend it.
"Zotfile" allows you to more or less automatically create a filesystem, so as long as you have a way to sync parts of your drive (or access a server) you can have working links to every paper in your library on any machine.