Sag is the amount the bike settles down on it's suspension when you get aboard loaded and ready to ride. As said above, set the sag at about 1/3 of the total suspension travel. The purpose is so you're riding in about the middle of the suspension travel to minimize the chance of topping out or bottoming out. Sag is set with the preload adjustments. Preload does not change the suspension stiffness. If there is no external preload adjustment on the forks, then you need to change the length of the spacers atop the springs to get the right sag for your weight.
Tire pressure is a subject good for eternal debate. The lowest allowable pressure is the recommended pressure on the original sticker on the bike, if the sticker is still there, or if you can find that data somewhere. Many think this, or a couple of psi higher is the correct pressure. The highest allowable is the max pressure listed on the sidewall. Many think this is the correct pressure, and it can be used, but it actually is the minimum pressure required to carry the max load that tire is rated to carry. Start with the original factory recommendations, try that, raise it a couple of psi, try that, raise again, etc., and see what gives you the best result. Tires must flex a bit to get warm for good traction. Too low air lets them flex too much, wear fast, maybe flex way too much get too hot and fail. To high might not let them flex enought in cold weather to warm for good traction. The tire is your first bump absorber, and max air on a rough road gives a harsh ride. Cornering feel and traction will vary with pressure, so see what feels good to you.
It's not what you look at that matters, it's what you see.
Henry David Thoreau