Note the air pump in the top center of the photo, this is where you need to be for the first option. For the second, Edmund's racer is the interface.
First time: Twirl the L thing in between the two racers until the air pipe attaches to Edmund's racer and click the red button. You will notice a little arrow on Edmund's side of the air thing moving quickly. To fill the balloons, click the red button to stop the air flow when the arrow is in the green area. Do the same thing to Julian's balloon, and you're good! (If you have trouble with this, just spam click the button. It worked for me! :0) )
For the side mission: This is rather intuitive. Grab some steam cans and some rubber patches for the materials needed. Once you have them, (2+ of each), drag a steam can onto the leaks (One at a time), and drag a patch onto the same leak. Due to a bug, you may need to do this twice per leak. It shouldn't use up 2 patches though.
Yes, you can play multiplayer without a subscription. You will not get access to new content, missions, or content you haven't completed outside of episode one. To regain access to this content, just re-sub.