I think that as long as you don't give the pup "asian eyes" it should be OK... No, they are not supposed to sleep with the hair do... You have to cut the grooming band every night and brush... that's what I try to do!!
About the bows, I think is more about getting used to it than other thing... I think if you are careful, they should not bother the dog.
It almost always breaks a little hair, but if you are gentile, and try to cut the bands instead of pulling, you minimize it... at least that's my experience...
