Anser one: Short story is that if you also have a recovery site with associated VC/SRM server, ESX resources, recovery plans constructed on the recovery SRM server using existing data replication technology then, yes, recovery can be performed with the protected site in an offline state.
Answer two: No, not without some serious custom scripting. Automatic failover is, from my discussions, seen an an undesirable behaviour.
Check out the book, free for download: http://www.lulu.com/content/paperback-book/administering-vmwares-site-recovery-manager/4343147
Cheers
Tim Oudin
Tim Oudin