Outline for a Hypothes.is Crash Course
I often find examples to be most immediately helpful. You might look at Literacy, Equity + Remarkable Notes = LEARN: Marginal Syllabus 2018-19 which has some solid multimedia resources around a group of educators annotating. It’s not only an interesting public example, but will introduce you to some helpful people in the space.
For a “textbook” example, I believe American Yawp may be one of the most annotated textbooks online.
I Annotate 2019 was an interesting conference and Hypothes.is has kindly aggregated videos of all(?) the talks. You can skim through some to find applications relevant to your interests. In addition to this example, the H blog is also a great resource for other examples and news.
More specific to your initial question, you’ve got a lot of options. You can open .pdfs on your local machine and annotate via Hypothesis, but if it’s for a bigger group, hosting it somewhere on the web that is easily accessible may be best. Hypothesis has also made some significant leaps for integrating their product into LMSes recently which also helps in seamlessly making accounts for new users.
Once it’s available to the group, you may want to decide whether you want the group to annotate in the public channel or if you want to annotate in a smaller private group. 
Most importantly, explore. Have fun. There are lots of off-label uses you’ll run across using the tool as you play around.