My knowledge only applies to piping designed per ASME B31.1 and B31.3, and thermowells designed per ASME PTC 19.3-TW.
Q1: In our industry, we will either
A) increase the pipe size to 4", then install a thermowell with 2.5" insertion, and then decrease the pipe back to its original size, or
B) install the thermowell into a coupling coming off of the tee. We do need to watch out for the IDs of these couplings, however.
We typically use method B, but only because these pipelines are in steam drain service in those instances and are not necessarily subject to the requirements of PTC 19.3-TW.
I do not have an answer for Q2, but I question whether you would actually have a need for a nozzle that long. Is this an issue with accessibility?