So to reply to my own post (I considered deleting it, but thought it might be helpful to others):
Regarding #1: I found this great maintenance article that labels all the parts:
It appears that the #16 switch gear that walks back and forth from the low and high limit and the 'thing' that it rides on (#7 worm gear?) were very rusty. I wasnt aware that you could use WD-40 (and a wire brush) on these parts so I did, and viola, no more noise. I guess I should mention that i also doused the gear wheels above it and the connection points being careful to keep the WD from the motor and gear grease area.
The people who had the camper before me did very little maintenance. But now I don't have that god awful noise and the winch works like a wonder!
I would still like input on #2. I'm all paranoid I'm going to be happy camping at a site one day and my motor locks up leaving me no way to get it down.....