In storytelling, it seems that the usual tense used is the simple past, but I'm wondering whether the imperfect/past habitual can sometimes be used as well. Here's the sentence I would like to translate -

There lived, at this time, near Carrigaline, one Robin Kelly......

Would it be - Bhí sé or Bíodh sé ina chónaí, san am sin, in aice le Carraig Uí Leighin, duine darb ainm Róibín Ó Ceallaigh.....?

I wouldn't start the sentence with "Bhí sé" and then add the subject much later.
I'd rather say:

Aigen am sin, bhí duine darbh ainm Róibín Ó Ceallaigh ina chónaí in aice Charraig Uí Leighin,...

you wouldn't use the habitual past there, because he didn't live there several times. "Habitual" doesn't mean it's a continuous thing, but something that happens several times (achan Luan, théinn chun margaidh...).

_________________
Is fearr Gaeilg na Gaeltaċta ná Gaeilg ar biṫ eile
Agus is í Gaeilg Ġaoṫ Doḃair is binne

ceart go leor - I'm surprised by that, I was under the impression that bíodh would have been the equivalent of l'imparfait, so it would be more like - he used to (do something such as) go to school every day?

It's not like the imparfait in French, it's really a habitual or frequentative tense. It's like "I used to", yes.

_________________
Is fearr Gaeilg na Gaeltaċta ná Gaeilg ar biṫ eile
Agus is í Gaeilg Ġaoṫ Doḃair is binne