Hey there - welcome to the wonder that is Siralim!
The bonus from Unholy Night will last for the combat. Once it is over, the stats reset to normal.
Breeding is still a bit complicated, but to get the most gene strength - to my understanding - you want the creatures that are breeding to be close to your mage level. Gene strength itself is just an indication of how many stat bonuses are added to the monster, and that stats seem to pull from the highest stats of the creatures being bred, though some tests on the forums report that some monsters seem to transfer over inherent stats instead of highest.
You can begin breeding as soon as you unlock it, which will be dependent on your team and how quickly you can get to that part of the game. It is somewhat stat intensive at the beginning, and unless you find a creature that you like RIGHT away, I personally recommend saving breeding for stats until you are established. I’m Mage level 108 and still don’t feel that I’m ready to get into hardcore breeding because I’m still working on a team, but your mileage will vary. I do have monsters with +30s, but this isn’t focused breeding like I will be doing in future. The biggest hindrance at early levels is that after a certain gene strength (I think +15, but that may be wrong), you need a ritual to hatch eggs, which means that you’ll be down a creature while it hatches.
Hope that has been at least somewhat helpful! Check in with the chat, as well, as there are a lot of people here that can answer breeding questions much better than I can (Umaro, Noetherian, jamosup, Psylisa, and AlaskA come to mind, but there are certainly others).
This thread may answer some of your breeding questions, as well: https://forums.thylacinestudios.com/t/2078