Mysql master-slave config in my.cnf
Are these things not to be set in my.cnf on the slave?


No, You only can set those values during execution time (using a mysql client tool)


  if I have to restart the slave mysql for whatever reason one day, how will the slave know where to pick up from? Do I have to go through the process of re-importing the DB to know the position again?


MySQL stores replication variables in files located by default in the data directory (Usually theses file names contain "relay" and "master" words) and it updates those file with every transaction, so no worries, if you need to restart your slave, the server already knows how to catch up the master.