Check out
www.sopl.info
All the information you need should be there, there is a manual explaining how the league works.
After the races have been run they are available for download and you can put them in your league races folder in SO4 and watch them using the race builder.
As for how good your horses are, none of us really know until they race in the league. Don't be put off joining the league because you think your horses might not be good enough there are lots of handicaps to enter so that horses of all abilities have a chance of winning a race.
Your horse that got beat once out of six G1 races might not have liked that particular course or perhaps the going didn't suit or the jockey used the wrong tactics or maybe it just had an off day, there are so many variables in this game that you can never be sure how your horse will run.
Remember it's all a bit of fun so join up and I'll see you at the races.