After I have prototyped my circuit and built AVR code for a device I want to sell, how do I go about getting mass production done? Will a PCB manufacturing and assembly shop be able to take the component list and the hex file and program it in or do I have to procure the AVR chips and manually program each one? I am completely new to this and want to learn.
Most PCB assembly houses (for large volumes) can program microcontrollers before shipping, but you may need to provide the programmer. They can take your files (BOM, gerber etc.) and produce everything for you.
Since you are a self-claimed novice, I recommend listen to How to Bring Your Project from Idea to Reality: Make a Living Doing What You Love from Mitch Altman. It is a ca. 1 hour talk, which covers a lot of things.