After contacting support I found the issues and wanted to describe them here.
The first issue was pretty obvious, I had created a "burner" iCloud account with the email I was trying to use. So if it says that email is in use you are pretty much out of luck unless you own it or can somehow access the iCloud account to release that email.
The second case where a member of the custom email domain was trying to add an email address under their name and it said something went wrong, try again later - this was strange. Basically that email was not officially registered as an email under the settings for the custom domain but was still somehow linked to my owner account. I imagine this was an artifact of when I setup the custom domain and assign this email to the member but they never actually were assigned to it.
In any case, the way to fix this is to use the iCloud from the web browser. The iOS or even macOS settings to add a new email address to a custom domain are not fault-tolerant like they are on the browser.
For example, when attempting to add this bad email address on iOS it just gives you an error message and does nothing. However, on icloud.com it actually say this email address is owned by another account would you like to request a transfer. Doing this sent the request to my owners account and I was finally able to create the email address for that member email. The browser version of the web might also be able to help with the first issue as well.
TLDR; When in doubt try using icloud.com to manage the custom email domain settings.
