New house with dirt backyard questions

[subersibo]

Hello, everyone! I am new to this forum. I live in Northern California (Elk Grove) and just bought a new house with a dirt backyard. We are planning to do the backyard ourselves as much as we can to save money and for fun. We are not planning on having any grass at all. We want it mostly gravel, stepping stones, a pond, some kind of ground cover like moss or creeping thyme, and a few trees and plants mostly for a Japanese themed landscape. Right now, there is a few patches of grass scattered all around and a little bit of space between the ground and the neighbor's fence.
Do we need to have the yard graded/leveled at all? Is that a requirement before working on the area?
Would it be okay to just put newspapers, mulch, and then the gravel and rocks to prevent weeds from growing?