1) Yes. As they are two different instances and boosted independently, they're different sources of damage. Poor NightMist.
2) I don't think it changes. It doesn't say "then hit the target with the highest HP" so I don't think you change the target. If Fanatic killed a target with the first half of Exorcism, would you let her change target? This works the same way, one target selection, then hit it twice.