Yes, you can. You can also replace the vegetable oil with pureed fruit like applesauce or mayonnaise. Olive oil can have a really heavy flavor, you won't notice it in chocolate but you might notice a little bit in light flavored cupcakes.
Yes you can but the olive oil will affect the taste. If you are after a mono unsaturated oil try canola--the benefits are almost the same. Do not use peanut oil it makes the little plaque platelets stick to cell walls.