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Kelp is an underwater plant that was added to Minecraft in v1.4.0. They are found underwater and grow from the bottom of the oceans, rivers, lakes, etc. They are can be eaten by the player or used as fuel for smelting items in furnaces.
A kelp plant underwater (via screenshot)
Kelp is naturally generated in ocean biomes near and around seagrass. You can pick them up by breaking them from the bottom which breaks all the kelp above it. You can also buy kelp from wandering traders for the price of 3 emeralds. You can also farm kelp as it is similar to sugarcane but this plant needs to be underwater at all times.
Kelp leaves floating to the surface after breaking a kelp plant (via screenshot)
Kelp is used for a variety of things, most commonly as a fuel for furnaces. You can smelly kelp to form dried kelp that can be then made into dried kelp blocks. These can now be used as fuel for furnaces. You can also eat kelp but it doesn't offer much nutrition to the player.
Using dried kelp blocks to smelt raw iron (via screenshot)
Kelp is a versatile plant block that can be eaten as well as power furnaces, smokers, smelters, etc. Since you can farm them is a good alternative to coal for fuel purposes. Even though you can eat them they don't offer much health so you'll be better off using it as fuel.
A. To make dried kelp you will have to smelt them in a furnace.
A. You can turn kelp into fuel by turning it into dried kelp blocks.
A. No, kelp doesn't require any sort of light to grow.
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