Do I need to lift engine out to remove oil pan?

Yes, the engine needs to be lifted up to get clearance for the pan to clear the pick-up and be removed. An easy way is to use an engine support like in the image. You lift it up after loosening the mounts and tilt it a bit. It generally doesn't need to go very far but it won't come out without moving it. Also, you don't want to force it because you could knock the oil pick-up tube out of position.