Shrine in Rotten’s Primal Bonfire room

In order to reverse the hollowing you need to use the Human Effigy (like you would use a lifegem), not burn it at a bonfire. This means you're able to use the item anywhere, and can save them for right before a difficult boss fight.

As of Patch 1.03, you'll regain a small portion of humanity for helping other players:

Players now receive a small portion of Humanity after successfully assisting in a Multiplayer session instead of regaining full Humanity.

Finally, there is a way to increase your maximum HP when Hollowed:

! The Binding Ring will ensure your maximum health can't go lower than 75% when hollowed. You find this ring in The Cathedral of Blue, right before entering the fog gate. It'll be in a chest to your left at the top of the drawbridge. If you are playing Scholar of the First Sin, then the earliest Binding Ring can be found in Heide's tower of flame right before the dragonrider boss fight, there is a Heide's Knight sitting in front of a chest, tackle him and you will receive the ring from opening the chest.

I think you are referring to the pursuer. He will appear to you in the forest of fallen giants first, (dropped off by an eagle) if you die, or skip it, he will appear at the top of the castle and this is one of the paths to No man's wharf (via the eagle). You CAN skip him and go to no man's wharf from beating the old dragonrider. You CAN skip No man's wharf but there are some good items and NPCs (a magic dealer and an NPC that BUYS your items for souls) so you might want to go through it. As far as ease, I wouldnt say no man's wharf is the hardest place, but you will die quite a bit (just like most areas). I think I saw that the pursuer also appears later in the Iron keep if you dont defeat him on top of the castle.