When you first cast it, the AI has already had its turn, but it still counts as one turn.  That's why it effectively lasts one turn shorter than in should.

That depends on what you want to do. Damage? Fire magic is generally the best, and has a powerful bonus for trained units which is available as soon as you get the spellbook. Buff spells? Air magic has several good blessings, most notably Haste (which is easy on the mana supply). Curses? Water has Slow, Chaos, and Pandemonium, which are all decent, although Chaos has some issues if you cast it several times on a single unit. Cross-school spells? Water and Life together grant an excellent blessing for any spellcaster. Several of the other spell schools also provide good bonus spells when you meet certain prerequisites. If you want strategic stun spells, Earth and Water are both good, and should probably both be taken. Strategic city damage? Water and Earth both have good spells for this. City blessings and training bonuses? All the elemental schools have decent spells for these, it just depends on which ones you want and how many you can squeeze onto one city.

As for which ones I'd get, and how far I'd go with them? That depends on what I need - getting Fire II gives me Flame Dart, which is an excellent damage spell, while Fire III gives me Fireball. I probably wouldn't go further into Fire than Fire III, though - summon spells aren't very useful, and I don't really care for the strategic army damage spells. On the other hand, Earth (which you already have) also has a decent damage spell (Shatter, I think it's called), and provides some decent unit buffs, and I don't really need more than one or two damage spells on a single caster. Air gives me several good spells, including Haste and both tactical and strategic teleport spells. Its damage spells are a little iffy, though, and is the only one of the classical elemental schools that doesn't contain a summoning spell, if you happen to like summons. Water gives several decent curse spells, but its summon spell is worse than average due to being lower level. Mantle of the Oceans, however, is excellent, and I think is available at Life II + Water II. Earth and Water both grant decent city blessings, and most schools of magic grant good blessings for troop training cities.

Since I personally prefer to play with damage casters rather than blessing casters, I'd take Fire first and upgrade it until Fire III. Then I'd consider taking Water for the curses and Mantle of the Oceans (assuming I took Life at character creation), or Earth for the damage and curses. That's for my generals. For my governors, I'll generally take schools of magic that provide good town bonuses (particularly easy-to-reach production or training bonuses like Mantle of Fire, since unless I have easy access to quest maps my governors tend to stagnate fairly quickly).