I can answer your first question.
The order you solve the fighting between the units are the following…
Initiative unit roll 5 for reaction die
Reacting unit A roll 6 for reaction die
Reacting unit B roll 4 for reaction die
Resolve one round of fire between Initiative unit and Unit B (the loosing reaction unit)
Initiative unit fire (-1 die for moving)
Reacting unit B fire
Resolve one round of fire between Initiative unit and Reacting unit A
Reacting unit A fire
Initiative unit fire with (-1 die for moving, -1 die for second round of fire this turn)
It might seem odd but that is how you solve it. This give the winning reactive unit the greatest chance to inflict damage and survive. Actual rounds of fire is resolve from bottom up in this case, over-watch fire function a bit differently.