Don't worry about asbestos content in asphalt saturated siding felts. The fiber is generally encapulated in a way that it is not a respirable hazard. Prevent dust by not sanding or sawing the materials, and you can even use some detergent activated water to further reduce dust as you remove it. If you want to know, find a laboratory and request that a sample be analyzed using polarized light microscopy (PLM). Test will run about $35.
The siding may be a shingle or shake. A shingle is tapered and smooth sawn on both surfaces for a uniform appearance. A shake is split to reveal the uneven natural grain of the wood on the face and is usually much thicker than a shingle. You will need to know what you have because you will probably need to replace some as you go through restoration.
New materials can be blended with the old to some degree with this simple formula: Dissolve one pound of baking soda in a half-gallon of water. Dip, brush or spray the replacement materials and lay them in the sun. After about 4 hours, the shingles should permanently turn gray.
There are a number of reconditioning options. Some will restore the color. Mildew can usually be treated successfully with trisodium phosphate (TSP) or household bleach mixed with water into a solution and scrubbed with a soft brush.
There are good reconditioning and construction tips at the Cedar and Shake Bureau. You will find answers to most of your questions at their web site.