From what I understand, the tradition (at least according to FI's family who are all from NOLA) is that you bake the charms into the bottom layer of the cake and obviously attach them to a satin ribbon. You have your unmarried bridesmaids and any female family members that are unmarried pull a charm before you and your new DH cut the cake.Each charm has a meaning. Usually there is usually a ring, thimble, a fleur de lis, etc. The ring means "going to marry next," etc. You can google what they all mean. Anyway, in my personal opinion, I think you should be able to have cake pulls whenever and in whatever cake you want. I also think you can change the tradition to better fit what you want, and if you want to include the hostesses then that's perfectly fine.
As far as etiquette goes, I would say that if you decide to invite more people than just the bridesmaids, be sure to make it even. For example, if I have two little sisters that aren't married, I wouldn't let one of them pull and not let the other one. That's considered (or used to be, anyway) rude.
Also, you can usually provide the pulls and give them to your baker. They will probably know how to put them into the cake without much issue.
We are doing cake pulls and having most of our unmarried family and bridesmaids pull a ribbon.
Yes, you can put them under the bottom or between the layers. If you put them between the layers the cake won't get messed up if it's done properly. Also, the charms are supposed to be close to the edges. Sorry I forgot to include that part.
At the one wedding I attended where the bride had cake pulls, she invited all of her closest friends up to pull one, married or not. It was a great way, I though, to honor those friends that she was close to or had a special relationship with, but maybe weren't included in the party. I'm actually going to try and incorporate a different version of this idea into my tossing bouquet--instead of having one bouquet, the flowers won't be tied together. When I throw it (hopefully), the stems will scatter and lots of ladies will be able to grab a flower, but only some will have a charm on them. I think it will be fun to see who ends up with what, and I won't have to worry about drawing the line among my friends.