2 - which lounge do they use. On the AY website they give the DAA lounge in T2 even though check-in is in T1. Is this correct?
DAA maintains a lounge in each of T1 and T2:
http://www.dublinairport.com/gns/at-...ve-Lounge.aspx
T1 and T2 are connected airside anyway - once airside, you can move freely between terminals (the 400-series gates are in T2; following the signs for these gates will bring you past the T2 lounges (Aer Lingus, Etihad, DAA); all other gates are in T1). (I am not entirely sure that the 400-series gates are signposted from T1 - as, in theory, people acessing T1 don't need to know about these gates - but you should be able to figure it out anyway).
As to whether you can user either or both, or whether you must use one or the other, I don't know. Staff at check-in or at the lounge will set you right. It would seem more likely that you should/must use the lounge in T1, though.
Neither lounge is worth getting excited about.