EDIT: I see now that Pivot Pro is software rotation. Sorry, I thought you were physically rotating.
Software rotation isn't necessary for MAME. It can handle rotating the game on it's own.
I'd recommend not using it and just using the rotation in MAME.
Your Mala layout will never need to change that way.
Are you running emulators other than MAME that you need it for?
Original reply:

Check "Rotate Mala with MAME after quitting game if needed"
You'll need to be using a layout that has both a horizontal and vertical version set up.
A single Mala layout file contains both a horizontal and vertical version, but most of the ones available for download only have one configured.
With the Mala layout editor program that comes with Mala, there is an option in the dropdown menu for vertical or horizontal.
This doesn't change the type of layout. It changes whether you are working on the horizontal or vertical version of your layout.
Both are contained in the same file, but don't have to look alike.
I ended up making mine identical for my rotating monitor. The horizontal one has black bars on the left and right. The vertical one has them top and bottom. To the user, it looks like a square and doesn't appear to change.

If you haven't made your own layout already, here is the wiki on it:
http://wiki.arcadecontrols.com/wiki/Mala_Layout#How_to_create_your_own_custom_LayoutMike Boss did a Fix-It-Felix layout that is set up for both directions if you wanted something already configured to play around with:
http://forum.arcadecontrols.com/index.php/topic,131257.0.html(attached to reply #3)
I don't know about your second question. I haven't had a cocktail cab.