Well, technically, since it's reflexive, it does mean "washing oneself", but it's the same thing as to be washed. It's hardly even a difference :-)
Nous- formal "we"
On- the form of "we" that most people use. But you can also use it as an impersonal pronoun- "On peut faire ça"- "It is possible to do that". I know a lot of teachers insist on saying it means "one", as in "one can do that", but it doesn't feel right.