OMG, it's so nice to see a screenshot of the game! *.*
1. Yes, according to my rules, you can do that.
2. Yes, jokers are out of the game once defeated. Other enemy cards go to the graveyard.
I also noticed something on your photo but I might be wrong. In the rules it says: You can only assign red ability cards to black enemy cards and vica versa. Did you assing red to red and black to black? Not a big difference though on the math side of things.
Thank you for your feedback again! It made me realise how poorly the rules are written... I wanted to get back to this project but I hadn't got the time but now I feel obligated to put this on my to-do-list!