Dear Leeneia.

Somebody actually told you you're not supposed to play C on guitar? Why, pray tell? There's nothing which shouldn't be played on guitar, in my honest opinion, except that which you don't want to play.

I agree with your first point. If a song is to be sung, it should be sung with the best use of the singer's voice, which means transposing if necessary. So for vocal stuff, the best key is the one which fits the singer and the song.

Peace, Mooh.