is both very clear and slightly obscure when it comes to question 1.
The clear part is that technically you may not reproduce a copyright-protected music CD for any purpose whatsoever - even as a backup/archive copy for your own use.
The obscure part is that you are not likely to come to any harm if you do it - provided the copy is for your use only, and will not be lent or given to anyone else. Be aware that this isn't the law, it's a common practice which is largely tolerated by the copyright holders.
As far as question 2 isa concerned the answer's a lot easier, and has been given by some of the other forum members - you may not use copyright-protected CDs for public performances unless you pay a fee, based on a sliding scale, to the Performing Rights Society - in essence the more you play the more you pay. Don't be tempted to ignore the PRS fee - the society is backed by an act of Parliament, and penalties for failure to register and pay can be very severe indeed.