1)Yeah sure, but you need to use it as a elephant, a heavy warhorse has been trained, you might want a warelephant. Dire horse stats are in MOTW, but that isn't a dire
warhorse.
2)He can target either, you can take riding combat, a feat that lets you use your riding check instead of the mounts AC, if it is higher.
If you want clarification, check
the SRD
From the SRD:
Elephant
This entry describes an African elephant. Indian elephants are slightly smaller and weaker (Strength 28), but more readily trained (Wisdom 15). These statistics can also represent prehistoric creatures such as mammoths and mastodons.
And:
Heavy Horse
Carrying Capacity: A light load for a heavy horse is up to 200 pounds; a medium load, 201-400 pounds; a heavy load, 401-600 pounds. A heavy horse can drag 3,000 pounds.
Heavy Warhorse
These animals are similar to heavy horses but are trained and bred for strength and aggression. A heavy warhorse can fight while carrying a rider, but the rider cannot also attack unless he or she succeeds at a Ride check (DC 10).
