Well one of your questions is half-answered in the FAQ but with no details at all.
Q: Can I still spend Avios on flights with the same airlines?
A: We're always looking at the airlines we work with to make sure we're giving you the biggest choice of destinations and flights possible, while saving you money on the price of the flight.
Avios will offer flights with British Airways, Iberia, Flybe, Monarch, Air Malta and lots of other airlines. See Avios.com for full details.
Of course, these flights will be subject to availability and to the Avios terms and conditions.