1. We don't key the line number that is stated on the image, but the actual line number, if you see what I mean. The first line is always counted as line 1 and then each line the number goes up by 1, even if it is a blank line that will not be keyed. So even though a 2 has been written over the 3 on image 1, you would still key 3 as the line number. And yes, we key line numbers on the Next Image form type too. This is so the records can be matched up "in processing".
2. The instruction for the year is "Please only expand 2 digit years when reasonably certain of the century." So you would have to decide for yourself how sure you are.