HA SQL AlwaysOn backup using Copy Only + Logs from secondary replica
Im actually using a similar setup with 1TB of the database. 


  
  Has anyone had a similar issue and resolved it with either option, confirming viability of the option for us?
  


Im using backup on secondary only.Even in few outages, I tried to use copy only full backups and log backups to recover them. 


  No issues that using copy only backups.


The above statement will give a clarity for your 2 and 3'rd questions.