If you quote from a published source, then you should name the source. It can help respondents to know the context.
1. I suspect that it is John (rather than James) Buchan, whose book or books the author burned. That is why "Buchan" is in quotation marks: to indicate that it was the written material and not the individual who was burned.
2. Yes. The bit about "bugaboo tales" also refers to "Night Thoughts".
Interested in Language