They like to burrow, but newspaper shouldn't be much of a problem. I haven't personally used it, but I've heard of others doing so successfully.
Same room wouldn't be an issue, and same rack could work depending on what the temps are set at. I keep my hatchling BP and Hogs in the same racks (seperate tubs, of course) with no problems.
As for the size mouse, that definately depends on the individual snake. Some don't get big enough for a large mouse, and some could easily take more than one.