I may not be able to answer everything you are asking, but I'm going to try.
a) You could use your select tool and dissolve only the polygons within a certain location. If you have features selected from a feature class, the dissolve tool will only dissolve the selected features.
b) When you do a dissolve on many polygons with differing values in a field, the dissolve will maintain each unique value for the field(s) you selected. You will still have many polygons within one feature class or shapefile and could possibly end up with as many polygons as you began with.
I hope this helps.