1. Do I need to transcode the XA-70 xf-avc files prior to editing (like ProRes 422 hq)the goal is to get as high quality + highly editable files rather than H264/265.
Transcoding can not increase the quality. That would need the transcoder to add in detail that was in the original scene, and there's no way a transcoder can do that. In fact transcoding will always introduce some degree of generational loss.
Transcoding H.264/265 to ProRes could result in smoother editing. However, I would recommend that you look into using a proxy workflow instead. I always shoot H.265, and I use proxies to edit, and that works great for me.
2.Do I need an input LUT for color correction of xf-avc files
XF-AVC is a file format, not a colour space. A LUT could be used (among other things) to convert colour spaces, like LOG to Rec 709 for example; but XF-AVC can contain footage in any colour space, so linking LUTs to XF-AVC doesn't make sense.
I don't know what colour spaces the XA-70 can shoot (I don't have one), but skimming the manual it doesn't look like there's much choice. Maybe it's just Rec 709, in which case no LUT is needed, unless you want to export to a different colour space, like Rec 2020. But if you are doing that, you should already know about it.
Of course you might still want to colour correct/grade your footage, depending on how it's shot, but that typically would be done by hand.
