1) I don't think customers can pick it up from your home. Probably the best thing would be to deliver the items.
No, you can only sell food from your home if your cottage food law allows it. A few states do allow CFOs to use commercial kitchens if they want to, but the items you can sell from home would still be limited to those your cottage food law allows.
I was doing some research and one of the questions I wanted get an answer for was if anyone knew or if there have been any studies done on how many households participate in cottage foods production and sales?