Highflier - on your first point I agree, careless use of 'and' on my part. You're correct the limit is 400ft anywhere in CTA.
On your second point tho, I don't believe there's anything forbidding operation above 400ft as long as the other requirements are met (clear of CTA, aerodromes, populous areas etc etc.) This is spelt out in the advisory circular AC101-3 8.2.1 "While this rule means that a model aircraft may be flown above 400 ft AGL clear of these areas..." I know its just an AC, and I'm not arguing its a good idea, but that's the way its written at the moment.