1) Not an option. You must file FBAR. Otherwise, criminal plus civil charges are possible. See link below for the new voluntary disclosure program.
http://www.irs.gov/newsroom/article/0,,id=234900,00.html?portlet=7
http://www.irs.gov/businesses/international/article/0,,id=235699,00.html?portlet=7
My advice is to consult your CPA or find a lawyer if you are late in filing prior years' FBAR. Due date is 6/30.
2) You report income and expenses separately on Sch. E. Two properties' total income and expenses will be lumped together to report one income/loss on Sch. E. Therefore, you do not need to worry about how to combine them together.