1 - I like to use all the colors when I play, and i give to each one the color I think fits then the best. To Atton I give orange since he worked for the Sith(red + yellow = orange), to Visas I give Yellow and use a mod that gives her the Visas lightsaber, so its red and yellow, to Mira I give the restored bronze since the Kotor comics showed the mandalorian knights with bronze lightsabers, Bao dur I give blue, Handmaiden I give silver since everthing about her is white color, disciple gets green, Kreia gets viridian since its close to green, the exile uses violet if male, cyan if female and red if dark side.
2 - Yes, since they are starting, they need to train first. But before the end of the game they all get normal lightsabers or double. I do this because if not, I would never use the short ones. I also wanted to do this in the first kotor but never found the right mod.