#1 My local print shop Staples cant read PSD's for printing but can read Tiff/PDF. Will any image loss occur from the conversion photoshop does, the image looks like it has jaggies when zooming in and out but seems smooth when I did a test print on a page in black and white?
TIF is exactly the same in quality, it only misses editing layers. PDF can be similar with the correct compression settings, but can be lower quality with no good settings.
#2 I created my CPO in RGB, do normal printing shops print in this format? From what I've read recently many only do CMYK. When I set Photoshop to CMYK mode the CPO looked faded. Looking for some advice here.
This is very logical. RGB on a monitor is allowing more colors to be displayed then in print. Look here:

sRGB is probably closest to your monitor, the SWOP is a common used set of printing inks in CMYK. See the CMYK area is much smaller. That is what you see when converting to CMYK.
The best option for artwork (you won't like it), is drawing in a vector program (Freehand, Illustrator) in CMYK directly. Either ask for a test print with CMYK swatches from the printing firm or send them a generic CMYK swatches PDF from internet to have a good set of sample colours to use in the vector drawing program. That way you can use the extends of CMYK to the max. CMYK has some areas where is exceeds display gamut too, especially with extreme blues or yellows.