1. should this be done on the port channel configuration and not on physical interfaces as things get replicated down the physical interfaces.
That is correct. You add the allowed vlans to etherchannel and not the physical interfaces.
2. does the vlans should exist on the switches if they are allowed on etherchannel interface. whats the issue if this doesn't exist.
If the vlans exist, than they will be allowed.
3. should the allowed vlan list on the etherchannel can have different set of vlans on two switches etherchannel config which are between two switches.
Usually you want the same vlan on both sides of the portchannel. If a vlan is not added on one side then it will not be allowed (just that one vlan).
HTH
