Will NTP take care of setting the VMS logicals?

If you are running NTP, then NTP will set the logicals SYS$TIMEZONE_DIFFERENTIAL, SYS$TIMEZONE_DAYLIGHT_SAVING and SYS$TIMEZONE_NAME if set_vms_logicals is included in the NTP.CONF file. Another configuration option that can be used to do additional things that need to be done is call_dst_proc. This will execute the procedure MULTINET:NPTD_DST_PROC.COM with the following parameters:

P1 = current time zone name
P2 = time zone offset in seconds
P3 = Day light saving time in effect (Y/N)
P4 = in twilight zone (the time when clocks fall back) (Y/N)
P5 = Startup or DST change (START or DST)

Should I use the VMS system parameter AUTO_DLIGHT_SAV?

No. This will cause VMS to change the time also and will have unpredictable results.