From the TeXshade README file: TeXshade is an alignment shading software completely written in TeX/LaTeX which can process multiple sequence alignments in the MSF, ALN and FASTA file format.

I have happily used it in the past, although large alignments were likely to cause issues (but that was many years ago).

I am pretty sure alignments are covered in the LaTeX companion, however, it's been a few years and I could be wrong. Personally I would avoid LaTeX for this (too complicated) and simply render sequences in SVG.

I don't believe there is a standard solution, or very many packages aimed at sequence formatting in LaTeX. Most people would roll their own, using their knowledge of LaTeX.

This is a few years old but might be useful for other purposes:

LaTeX Tools for Life Scientists (PDF)