1. Last November, there was a patch named "One Tamriel", with the intent purpose to make exactly what you're asking for work properly: having players of different levels play together, without one being completely outlevelled. That's done by "scaling" everything to CP160 figures. So at level 5, your basic stats like health, stamina, magicka, weapon and spell damage, are increased very considerably. You can easily tag along with your level 50 friend and do - provided you both know the basics - quite good damage.

2. You can generally do quests only once. But you can indeed be grouped with a friend, having only one of you be on a quest. Like Mayrael said, that will have the potential problem/disadvantage though that certain NPCs are only visible to players who are doing the quest. At some point you might even become invisible for each other in certain areas. That means you're being put in separate instances of the quest region, because the things going on in there are too different for the both of you.