1. My counselor says that it's good to send in apps ASAP because adcoms will read apps that came early more thoroughly (before they get tired). Does sending in apps early (and having my file complete) mean that adcoms will read mine earlier?
2. If students apply to same colleges, do they compete with each other?
I think you're trying to "play the admissions game" too much and trying to overanalyze what the admissions officers do and think. Knowledge of "the game" may give you a tiiiinnnyy bump, but...
The most important thing is developing who you are. Focus on your academics and extracurriculars. Do well and find something you like, and commit to that. You only have control over yourself, so just do the best you can. Please don't waste time trying to figure out what others think.
I think you are getting inaccurate information. Applications are not read when they recieved. They are organized, often by region by school and read when the deadline is past. After that I suppose if your HS name is Adam High, you might get read before Lincoln High in the same region if and only if the adcom doesn't have other system of randomizing the apps.
The answer to #2 have been covered repeatedly in other similar posts.
