You could power the device from USB, but I have found some USB connections to give lower than 5v, so I recommend perhaps you look at a buck/boost circuit.. something that will give you exactly 5v regardless of what supply is coming in..
Alternatively, use the USB power and drop the whole regulation thing down to 3.3v [78L33] (still power the micro from the ~5v) so your power to the strips will be 3.3v, but you may need to recalculate the analogue voltages, but I guess that would be just 0.66 of the values you had previously. You should be able to run this direct from USB, which is normally rated at 400mA ish on PCs, my guess is you are drawing most of your power through those LEDs that are on.
Make sure you get some good smoothing on your supply to the strips, as any small dip in voltage will be noticeable on the returned analog readings, probably don't have any flashing LEDs or things that may cause little Vdips
With the two-fingers-on-the-'fretboard'-at-once issue : if you had a finger on the 9th fret and one on the 7th, the average value may work out to be ~8th fret, but to be honest its one of those try it and see things. On a normal guitar, any fretting lower than the highest fretted note on a particular string does not sound, this electronic version doesn't quite work in the same way as you are placing TWO wipers onto the resistance path simultaneously
Probably, and importantly, is the distance from your strips to the board, keep those analogue signals short, or alternatively use some coax/shielded wire (but I cant vouch for this as an improvement)