I believe that it will not help with seat assignments done online, but I also believe it will if you call. According to the rules (again, I believe) you have to be on the same PNR to get the bag fees waived. However, many here have reported getting the waiver simply for traveling together.
Cheers.
Seats are easy. You can just call and get any non-status person into the elite-only seat next to you. I do this frequently because often I share a few segments with someone else but not the whole trip. Seems to involve a lot of typing on their end.