1a) I dont know enough about ArcadeVGA, but I know that on some VGA cards you can make it invert the colors before it goes out to the monitor -- right in the drivers.
1b) Many Nintendo cabs that were converted to other games MAY have an inversion circuit (the good ones, not a hacked 7404 chip) board mounted on top of the metal surround that goes around the flyback. Look to see if yours has it. You can select inverted or non inverted signals by moving a jumper.
2) Correct. At least all the Nintendo's I've seen from DK, DKJr, Mario and thru the Playchoice, they're all proprietary connections, usually using 2 separate 44 pin connectors instead of a single 56 pin Jamma one.