Q1: The spouse with the envelope number has passed away.  Can the surviving spouse keep that number?
Yes. Simply edit the deceased spouse record by removing the number and adding that number to the Donor record of the surviving spouse.  

Q2: Can each spouse receive separately numbered envelope mailings?
Yes. They should each be set to the Individual Statement Type since getting two sets of envelopes is an indication they give separately.

Q3: Why is a Household's Alternate Address the default address in the Envelope File?
If there is an Alternate Address record associated with a Household and there are no dates supplied in the Season Start and Season End fields, the Envelope File will default to this address.