Electronic – arduino – How to graduate from Arduino to using a microcontroller directly

I've been working on an Arduino project. After I get everything working using the Arduino, I would like to move to a solution that does NOT use Arduino. That is, I would like to use a microcontroller without involving the Arduino board. This will allow a single board, no shield solution.

I know there are methods to make my own Arduino on a breadboard, but that's not really what I'm trying to do.

I'm not really how sure how to do this.

Unless there is a better option, I'm leaning towards using the ATmega328, which is used by the Arduino. I understand that development tools are available free or at least not very expensive.

For the purpose of this question, assume I can get +5V to my circuit.

My first question is how to program the MCU. I believe there are two options:

1. Buy a programmer, program the MCU, and then place the chip in my circuit.
2. Design my circuit to include support for in-circuit programming.

I'm assuming that if I go with option #1, it's as simple as inserting a programmed chip in my circuit; I don't need anything else. Of course changing the software would be inconvenient.

But for option #2, I'm not sure what I need. From the bit of reading I've done, I think I need a programming cable, and a connector on my board (what type?). Then I guess I (properly) wire the connector to certain pins on the ATmega.

Either way, I will need Atmel studio.

Second, other than the power supply, is there anything on the Arduino that I absolutely need? I guess maybe a reset switch?