"Will adding my blog URL help my squidoo page?"
I don't have a lens and don't know all the ins & outs of Squidoo at all.
However I think that just offers you another way to get content on your lens.
So for example if I started an Affiliate Marketing lens, I would import my 5 Star blog feed so the articles I took time to write on my blog would also show up for people that read my lens.
The
PR of your blog doesn’t matter and it's not going to boost your S rank. However it's possible that if you blogged about "little green widgets" your lens would come up higher than your blog page would. So as long as the 2 are about the same topic I'd add it. Once you put in the url to your feed, it will auto-update with no work on your part, at least I assume that's what you are talking about.
And yes on your lens, any content you generate can be pulled via an RSS feed.