What exactly are the goals of your modeling? Are you hoping to model flame spread, or determine heat loads to structural members from an assumed fire?
In response to your questions...
1. The data from the obstruction which appears last will override. Here is the relevant section of the FDS User Guide:
If two obstructions overlap at one or more faces, the one listed last in the input file takes precedence over the one listed first, in the sense that the latter’s surface properties will be applied to the overlapping face. Smokeview renders both obstructions independently of each other, often leading to an unsightly crosshatching of the two surface colors where there is an overlap. A simple remedy for this is to “shrink” the first obstruction slightly by adjusting its coordinates (XB) accordingly. Then, in Smokeview, toggle the “q” key to show the obstructions as you specified them, rather than as FDS rendered them.
In PyroSim, you control the order of obstructions by rearranging them in the Tree View. However, the material properties may not be that important, depending on the goals of your modeling.
2. Yes, you can define holes and obstructions in the same locations. The "Permit Holes" property of the obstruction will control whether or not the obstruction is affected by the overlapping hole.
3. If you have a known fire size, a simple burner surface is probably sufficient. You will probably also need to set your reaction properties to specify the correct combustion products.
