I can't help you with question 1 as my set-up is not the same as yours.

On question 2, you shouldn't see any bubbles coming out of the reactor if it is working efficiently as the CO2 will be in solution with the water.

It would be a good idea to put a bubble counter after the needle valve to note the flow rate of gas. I made an adequate one out of an old PH test kit test tube and some air line tubing, but you can buy the commercial versions.

Ian