Does the brake pad need to fit perfectly into caliper?

Your brake pads need to fit exactly in the width of the caliper. You can't have any space there as it might be dangerous if you need to push hard on the brakes. The pads can be a little longer or shorter than your previous ones. If your pads are longer, the surface of the brakes touching the discs will be larger, thus will generate more friction and therfore better stopping power. In contrast will shorter brake pads generate less friction and therefore a litte less stopping power. Your brake pads must be within certain limits the manufaturer specifies, though. they can't be too large and they certainly can't be smaller than the size of the surface of the brake pistons.

It's normal you needed to hammer the old ones out, as the brake pads might be stuck due to extreme temperature changes. Before you read on, make sure your brake fluid is within the limits on the reservoir, your brake pads touch the discs and the cap of the brake fluid reservoir is closed!

If you just replaced your brakes its best to "brake them in" to make them last longer and let them do their job better. Look for an open road with as few traffic as possible and accelerate to some decent speed and push on the brakes as hard as you can without creating any flat-spots on your tires.. Make sure there is nothing in the car that can get flying, though :). You will notice that there will be a sqeezy noise on the first few brake attempts. This is perfectly normal. You'll know when your brakes are ready when they are almost "silent". While you are doing this, make sure the car doesn't tend to go to the side of the road. Now you're ready to head out and use your brakes as you normally would.