First, basil is a woody plant, and the main stems do that. It's just the new growth that are green. Second, you mentioned last year's multiple plant in a 10" pot. Yes, that was way too many. This years single basil in a 6" pot is still crowded--I do mine in 12" pots, with 1-2 plants. Basil can grow 3-4' tall, though potted is generally smaller, I generally keep mine around 16-18". Third, the bushiness of a basil plant does depend on the pinching off to encourage bushing. It can be done quite regularly, though now that yours is woodier on the bottom, that part won't bush as much as if you pinched all along. You may have more of a topiary shape now. Guessing that you've mostly seen bunchy basil plants at the supermarket. Those have been forced growth, which is why they are bushy with non woody stems. They're meant to consume quickly and are not healthy plants for growing.

Now, feeding. If you used a fresh potting mix, your basil will not need much fert right away. Looking up the fert you mentioned, it is not a good one for herbs, particularly potted basil. A little too strong on all the numbers (5-7-3). I would not use it again (though it's fine for veggies, herbs really don't need feeding unless you're talking long potted perennials). A little would have been fine when potting, but it's going to encourage flowering as well, which you don't want in basil. If I do feed my herbs, I use a fish/seaweed liquid that's no more than 3-2-2 and mix it on the weak side.

Although there are diseases that can cause yellowing in basil, I'm guessing yours is more from overwatering and possible nitrogen overload. Basil does like water, but needs to be well drained too. You don't want to let it go completely dry between watering, but make sure you stick a finger in the pot to find if there is moisture below the surface before watering. If it is that, it will bounce back. If I am wrong, then it will go downhill from here and someone else may have better knowledge than I. See what happens and don't give up!

Thank you so much balloonflower for the detailed answer. When I received this basil from my neighbor the beginning of this March, it was long and spindly with just one main branch. She was growing it indoor and may be it was looking for more sunlight (?). Anyways I cut 1/3rd back and it has branched out since. It's not in fresh potting soil, so I added that fertilizer when I transplanted 3 weeks back. I will keep it only for my tomatoes and peppers henceforth. I will buy fish and seaweed liquid this week. How many weeks should I wait before adding the liquid seaweed? Or should I fertilize it at all for the rest of this season? I mixed fresh compost with the potting soil and also mulched with it. So I'm thinking that should provide the necessary nutrients for the plant if basil is not a heavy feeder like tomato. I usually do water only when the top is dry (about once a week). Even if it doesn't get bushier like the pictures on the internet, I hope it remains healthy enough to last through a season. I don't use a lot of basil anyways but I do like a good harvest for some pesto once in a while.