Question 2 : How can I use AC to give the arduino high/low input? When main switch is on high, when off low? Like the sensors we use with DC?
As previously pointed out, you can't just connect it. However, I don't think that's what you meant. You probably want to know how to sample to see if mains voltage is available somewhere (like after a switch). Here's a pretty good way to do it, and it can be done pretty safely this way:
http://www.simple-electronics.com/2012/02/isolated-ac-power-line-interface.html