After entering an incorrect Wi-Fi password during provisioning, does the device need to be manually reset?

No. RainMaker devices have CONFIG_APP_NETWORK_RESET_PROV_ON_FAILURE enabled by default. After the device fails to connect to the router a set number of times (default: 3, configurable via CONFIG_APP_NETWORK_PROV_MAX_RETRY_CNT), it automatically re-enters provisioning mode. You can then retry provisioning from the app without resetting the device.