I know that conf files can now be started directly from the ES. Nevertheless, the question, if I store a dosbox.conf in the directory of the respective game, will it be used and read automatically (e.g. when the exe is started)?
No, it's not going to be read automatically.
If I use cycles=auto, will the game be played with a suitable speed or is there a default value for old games like Might & Magic 1?
Some older games need a fixed cycles, since they assumed the CPU speed will be fixed. You'll have to experiment and see, if auto is not working correctly, then start with a fixed cycles (5000) and add more until it works fine.