1) Units attacking from mountains do not ignore the terrain protection of hills. It is stated that units at the same height as your unit ignore the battle dice reduction. Mountains and hills are not at the sam height, so the reduction applies.
2) Yes, a unit on a mountain can be attacked by units at ground level.
Mountain Questions from the FAQ (Comment / Question)
Q. Can an Infantry or Armor unit on a Mountain hex see over a terrain hex that blocks line of sight since mountains are at such a high elevation? A. No. All terrain that block line of sight, even though they may be low elevation, prevent units from seeing more distant targets. Note: Unless noted otherwise in the scenarios special rules, Mountains are impassible to Armor and Artillery units.
Q. What is the battle reduction when targeting an enemy unit on a mountain hex? A. Infantry and Armor battle dice are reduced by 2 when attacking from below (hill or countryside hex) or from another mountain hex that is not part of the same mountain range. Note: Units attacking from hill hexes still suffer -2 battle die when attacking units on mountain hexes.
Q. Do Mountains and Escarpments block line of sight for artillery units? A. No, unless stated otherwise in the scenarios special rules.
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