1) You can import audio files from your iTunes library. Go to MediaBay -> Select Audio -> Tap Import -> Select iPod Import.
However, your iTunes library doesn't support MIDI files in the first place, so I would recommend using iTunes File Sharing or the WiFi server.
2) When opening a MIDI file, Cubasis loads each instrument on a different track and assigns a fitting instrument to it, so you have all tracks available for editing. To edit a MIDI event, double tap it (you can only edit one MIDI event with the Key Editor at a time).