1. Justin talks about this in the video lesson. Essentially, throughout the verse it goes Am Dm Em. Until the last line. Then it goes Am Dm Am. Watch the video lesson. Also, Justin doesn't mention it in the video, but later in the bridge the pattern switches between the two unexpectedly. This is shown in the BSB.
2. As a Stage 2 beginner, Justin advises keeping your thumb behind the neck without muting and practicing being accurate with what strings you play. Later, you will refine your technique, bring your thumb over, and mute the low E for Am and Dm. Depending on the size of your hands, you could try to mute the A for Dm as well. That's not easy to do, so it's less common. You also run the risk of fretting the note on the E string giving you a Dm/F# (sounds bad) or Dm/F (sounds good but unwanted here). See slash chords, but don't bother here.