2. Can I apply for COS here to H4 in the U.S. and then go back soon afterwards and reapply H4 from the U.S. Consulate overseas when the COS to H4 is still pending here in the U.S?
-Actually, you do not need to file the H-4 petition (for COS) within U.S. if you plan to go to China. You just bring the necessary documents and go to any one of the U.S. Consulates in China (wherever is convenient to you) to apply for an H-4 visa directly and that is all!
3. We don't plan to stay in our current address for more than 3 months now, can I use my friend's address on the form I-539 so when the COS is approved the notice can be mailed to my friend's home? Would it cause issues when INS notice that my address on Form I-539 is different from my previous on file?
-No problem, just write "c/o your friend's name".