No not necessary but it is recommended and adds a ton to the experience. It's a AP platform and taking pictures without being able to see what your shooting is kind of silly.
Not sure if you "Have" to use a phone with data/WiFi but you are limited on the size if it is going to be held in the controller mount. 6.2" is the biggest from what I can gather. That also limits you to phones generally speaking as I don't think there are many tablets in that size range.