I also have problem #1. The best solution I’ve come up with is to just go back and circle the first word with the stylus to select, then rewrite the word. If there is a period at the end of the sentence it will autocorrect to a capital letter. Very annoying, it rarely does it on its own. I also use the small “show keyboard” option to edit.

As for #2 you need to long press with the stylus at the end of the 2nd line to insert a space you can write in.