A. That's correct, it can't give you +2 Harm if you aren't dealing some sort of Harm to begin with.
B. That one is more open to your interpretation. I can see reading it either way, boosting or not boosting the Cleave damage. Personally, I would read it as only boosting the primary harm of the weapon, and the Cleave effect is still just 1 to the adjacent enemies. But! I can also see a cool reading where the red crown fills you with rage and your Cleave is extra potent. I leave it in your hands to interpret it the way you'd like!