Transactions in Sidechain
Q1: It depends on the sidechain. Every sidechain can implement their own rule to create and represent/encode adresses.

Q2: This is an active area of research. Some people propose implementing sidechains via Zero-Knowledge proofs or other ideas that either require Bitcoin rules to change or mining cooperation or both. Some sidechains already deployed, like RKS, propose there are a set of nodes you trust to hold custody of bitcoins transferred to the sidechain, much like a bank.