obscuring email addresses in user to user email conversation my registered users can send each other proper emails (not private messages) through contact forms on their user profiles. When user A sends such an email to user B, I need user B to be able to reply to the email that was sent by A such that the two can start having an email conversation.

*) How can I encrypt the sender's and the recipient's email address such that the original email addresses of A and B are never revealed, even if the whole email conversation - after being initiated through the contact form - continues in their external email mailboxes?

Let me elaborate this a little bit further, even though I don't know if the path I am suggesting to take is at all feasible: To each user I assign a randomly generated key, e.g. 1k1 for user A and ki8 for user B. I would then set up the contact form on the profile of A such that every submission gets sent to 1k1@mydomain.com. Then, how can I make sure that every email going to 1k1@mydomain.com automatically gets forwarded to the actual email address of user A? If this could be done, I would simply replace the sender of this forwarded email with ki8@mydomain.com and upon reply start over again.
I think this is perfectly possible, though out of the scope of Drupal to some extent. Drupal can set from and reply_to headers in the mails sent out to, eg "John Doe &lt;abc@mydomain.com&gt;". You'd have to then set up a mail service on the domain which would receive any replies and forward them to the correct users. How you would configure the mail service is a matter for another forum, I think.

(I suggest you edit the original question to make it about obscuring or masking the original email address rather than encrypting it. What you describe is not really encryption.)