Yes it is how all sheep were shorn before machines. I believe machine shears were invented in 1882. Well that's when the first sheep was shorn by machines. By 1888 they were being installed in woolsheds.
Yep, shearing is probably the most physical job in the world. Surprisingly though, shearing with blades (hand shears) is actually easier than using machine shears.
The machines are usually more stressful for the animal due to the noise and they don't leave any wool for protection. Blade shearing leaves a little wool on for cover and is quiet. There are accidents with both but usually nothing serious.