1. Yes - same priority
2. Unfortunately, the group of 4 will get skipped.
I have this same issue on an upcoming flight on Sunday. My gf and I are on the same PNR and awaiting SWU upgrades. I also have my friend on the same flight upgraded on the waitlist with an SWU. If only one seat opens up, he'll likely get it. Although, in this case, if this happens, my friend and my gf can sit in economy and I'll take the biz class seat since they're my SWUs.