Matt
It can be any domain name you want, it really doesn't matter that much if you are using it purely for ssh. However you may as well use the domain name that is already used in your company.
No an entry for the switch does not have to be added to DNS for it to work but you may well want to do that anyway so you can use the name rather than the ip address when you ssh to the switch.
The domain name is needed as it used as part of the crypto key generation.
crypto key generate rsa is used to generate a key after you have set the domain name.
HTH
Jon