1) Yes, it's possible that would work. But it's not likely. What's more likely is that the deck is impinging on the concrete mess UNDER the coping, instead of the coping itself. However, you can do whatever isolates the coping and bond beam from the movement of the deck.

2) I don't know. Probably any mortar that's mixed to be relatively impervious to water would be OK. (Mortar that's highly absorbent, due to low cement or high water content, is likely to suffer from freezing, if you are in a area that's (a) wet and (b) cold in winter.

PoolDoc