There's currently not a way to do this with a Confluence-only OnDemand instance, but you can contact Support and provide a CSV file with the data and we can import it for you.
Note that the format of the CSV file must follow the format as described in https://confluence.atlassian.com/display/CROWD/Importing+Users+from+CSV+Files
Yes -- in fact we cannot send out the welcome email using this method.
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