I now have sufficient information from the textbook sources. Here are the answers to all three questions:

The diaphragm develops from four structures (septum transversum, pleuroperitoneal membranes, esophageal mesentery, and lateral body wall) and is normally complete by the 7th fetal week. In the 9th–10th weeks, the gut — which had herniated into the extraembryonic coelom — returns to the peritoneal cavity. If diaphragmatic closure is delayed or incomplete by that time, abdominal viscera (stomach, intestines) herniate into the thoracic cavity.

The left side closes later than the right, which is why ~90% of congenital diaphragmatic hernias occur on the left (Bochdalek hernia). The herniated bowel compresses the developing lung buds, preventing normal lung growth and resulting in bilateral pulmonary hypoplasia — the direct cause of death in this infant. The longer and earlier the herniation, the more severe the lung underdevelopment.

This description — a defect lateral to the umbilicus with extruded bowel not covered by amnion — is classic gastroschisis. It results from a defect in the anterior abdominal wall, most commonly to the right of the umbilical cord, due to failure of the lateral mesoderm/body folds to close properly during development. Because there is no peritoneal or amniotic membrane covering, the bowel is exposed directly.

Should you be concerned about other malformations? Yes, but less so than with omphalocele. The incidence of additional congenital anomalies with gastroschisis is relatively low (~10%). Contrast this with omphalocele (midline, covered defect), which carries a ~60% rate of associated anomalies including major cardiac defects, chromosomal anomalies (trisomy 21, 18, 13), and Beckwith-Wiedemann syndrome. Still, cardiac and intestinal anomalies should be screened for.

The diaphragm initially develops opposite cervical somites C3–C5 in the neck region. The phrenic nerve, which supplies motor and sensory fibers to the diaphragm, grows into the developing diaphragm at this cervical level. As development proceeds, the diaphragm descends from the neck into its final thoracic position, dragging the phrenic nerve along with it. The nerve elongates as it follows the diaphragm caudally — but its spinal cord origin remains fixed at the cervical level where it originally formed.

This explains the classic clinical mnemonics: "C3, C4, and C5 keep the diaphragm alive!"

Cervical segments of origin: C3, C4, and C5 (with C4 being the predominant contributor).

This also explains the clinical phenomenon of referred shoulder pain in diaphragmatic irritation (e.g., subphrenic abscess, ruptured spleen) — the phrenic nerve shares cervical roots with cutaneous nerves supplying the shoulder (C3–C5), so pain is referred there.