1. How do you set up Office 365 on Outlook 2011 and iPhone?
via auto discover, please let me know if you need more details
2. Can the user send emails via Outlook 2011 and iPhone without clicking the send/receive button? Does the emails stay in Outbox folder?
Yes, the user can send without clicking send/receive button. It does not stay in the outbox.
3. Please also check the send/receive settings.
what settings are you looking for?