Is it okay to have a login requiring users to first select from multiple services?

1. Do all users need P1 for conditional access?
2. When authenticating one Azure service to another what service can we use to avoid having to store credentials in code?

Do all users need P1 for conditional access?

Yes, the requirement is that the Azure AD Premium P1 license is applied to all users who make use of the feature. Azure AD has always been licensed per user and this applies to all Azure AD features.

When authenticating one Azure service to another what service can we use to avoid having to store credentials in code?

MSI gives your code an automatically managed identity for authenticating to Azure services, so that you can keep credentials out of your code.