As a Norwegian, I have no problems understanding both Swedish and Danish. That's mostly correct the other way around as well.
1: Especially young people will switch into English immediately, and I find that I have to force myself to not do that when talking to fellow Scandinavians. It's a shame since there's often much meaning lost in the double translation + our languages are quite beautiful, IMHO.
I wish they would teach us something more useful than Finland's regional Swedish dialect and accent -- it only has a few hundred thousand native speakers, of whom 95% speak Finnish anyway :(