Country-2 is an example. Look at the checkout form and make note of the country element name.
in your case, it looks like the shipping country element is just named Country:
<select class="formMenufield_Medium ui-state-error h5-active" name="Country" id="Country" rel="" tabindex="8" title="Please select your country." required="true">
so edit the code appropriately.
you questions 1 and 2 are as designed, with express checkout, there is only a shipping form, they set the billing when they get to paypal. and the country select list will only trigger a state list if US is selected, for other countries, a regular text field is used.
