yes, you can charge while using the N7 like gaming or watching a movie - no problem altho it won't necessarily charge as quickly or increase the charge at all if you are using USB level vs wall current electricity
yes you can charge overnight but I rarely do since complete charging takes only 2 and a half hours normally. Why trust the circuitry even tho it is suppose to shut off if you don't have to ? It's probably fine but I prefer to micro-manage. Li-ION battery record is not exactly stellar is it ?