I don't claim to be an expert on all things MySQL, but I'll take a crack - maybe Jason or even Jeff will step in and correct me here.
1) It doesn't take any (significant amount of) time to propagate, however it does take a little bit to update within our system. There was some talk of allowing multiple databases under one database hostname, but this does limit our flexibility a little. There are some past disccusions on here about this very issue.
2) This I'm not totally sure, but I think not. You can always try. :>
A few things are possible here. You might submit a support ticket if you see this a lot - ask them to pass it along to Jason -- make sure to include the exact time(s) you're having the problem. You might be running up against your maximum number of connections (if your site is already taking up a lot of connections, for example).
Is the error consistent / reproducible, or intermittent.