This. To sit together, buy the tix together and you both will be eligible for the upgrade. In this case you will be placed at the bottom of the upgrade list and it is "all or none". You can also be on the same pnr and split reservation (you have to call DL to do this manually). This leaves you with the GMs on the upgrade list and your partner below all medallions. Unless the flight is completely wide open, the chances of both of you getting upgraded diminishes greatly. Even if you both get upgraded, there is a good chance you won't be sitting next to each other.

Personally, I like traveling next to my wife because we can share our personal space which makes traveling in Y much more bearable....even more so if we are seated in EC or in an exit row. So I never split our pnrs, even if this means me passing up a likely upgrade.

As for your second question:
If you have a DL amex, you can use "pay with miles" upon purchase. Mile redemptions gets split between the tickets being purchased.

If you buy your ticket and use miles for an award ticket for your partner, your pnrs will be separate. So your only choice is to call DL to see if they can link your pnrs to get on the upgrade list (I forget at the moment, but I think award tickets are upgradeable for GM+, not sure if it makes a difference if you are on a separate pnr) Linking your pnrs helps in keeping your seats together, but this isn't guaranteed.