Question #1.Drop the unit with out the upgrade on the unit with the upgrade and the combined unit will have the armor or improved weapons.If you do it in reverse the combined unit will lose the upgrade.
Question#2.Friendly fire casualties are part of the game.If you click on a specific unit that you want your missile unit to attack they will keep firing no matter what.Sometimes it is better to have your missile unit "hold position" and let them pick their own targets,supposedly you will have less friendly fire casualties.Don't know how true that is.Many people in the community complain that there should be more friendly fire casualties,and in some respects I agree with them.
Tito