I have contacts at Apple. I just now went through the same errors with my Network Engineer.
Issue 1
The error messages, "unable to conform activation" or "unable to connect to device" (even though it did) are due to the new features in iOS 7. There is a bug in AC 1.4 with these new features. We reported these two errors today. The errors were not on the bug list, but they are now. :-)
"unable to conform activation" or "unable to connect to device" work around:
Quit AC
Launch iTunes
Setup all iPads in iTunes as new devices
Make sure all the devices "Trust" your iTunes
In AC uncheck all profiles and apps
Supervise/ingest all the iPads into AC 1.4... you should bypass the errors
After the iPads are supervised you should be able to add your profiles and apps
Issue 2
When setting up a restore backup your iPads still do not bypass the startup questions.
This error is documented at Apple and they are working on a fix.
Start up questions work around:
Create the restore backup on the highest model of iPads you have. e.g. iPad 4 vs iPad 2
Restore your iPads as you normally would
When the iPads restart to the startup questions, powercyle them
When they restart they will bypass the start up questions
Hope this helps