Exoticfruits is right, the children need to be dealt with as individuals and actually if you think that all behaviour is communication, both of them are communicating a need for your attention/recognition/approval in two different ways but both come from the same place. Your DS2 that is scared, I believe is actually wanting the nurturing, the softness, the time you spend with him when he articulates this view, he subconsciously or even consciously would of course say for DS1 to go to bed the same time so he is not having the extra time with you. DS1 communication/behaviour is displaying a desperate sense of approval from the world around him, teachers and you.
The use of banter/gay and words to each other that our negative are that, they are negative and these your children are young to be allowed them in your house if at 7 and 10 these are ok, what will be ok at 10 and 13 or 13 and 16, but this is your choice of what to allow, you set the tone in your house, and you are the adult, remember that if you want them to not speak like that you can make the change and if you want them to, that is ok as well....
To me it sounds like you need a hug and support, I may have this wrong, but the balance in your house sounds like it has tipped to children 1, you 0....you are in control and I think you need to put in rules and boundaries to affirm you are the adult, you set the rules and show them you are in control. When children feel like they are the centre of a family, descision making and have the reins it causes an natural balance and they act out in subtle or not so subtle ways, your scared DS2 is really looking for a confident mum to say, no it's all fine, I'm herenif you need me, but there are no monsters etc..
And your DS1 is looking for you to set the rules and recognise him for who he is...
7 and 10 is still very young, your expectation of them both maybe too high, imagination is still key in play and development even at 10, so wanting to watch younger cartoons and be silly is a way the 10 year old is saying, I'm still young....
With the TV comment, it's not about the 1hr of tv, it's about what they are watching, so many people push the children to the next level of development before they are ready through TV....
Anyway, it must have been horrible for you to hear the comment from that child's nan about your son, heartbreaking and frustrating all in one, what an helpful comment....between now and high school is a long way....
I would book to see the teacher and make a plan together about not encouraging him to be the first, a good teacher can do this in lots of ways, like making the winner someone who ws fast but had the most correct rather, this slowed the boys I used to teach down, also by putting other specs on the rules, like the date must be on the page, the margin etc,etc
This is long sorry.....I will post about the marble and some other team ideas later in the dag, best dress my two boys....younger than yours, but boys are great enjoy them :) quick idea for tonight or the weekend... get them to come in from school tonight and build a den together and give them tea in the camp, break things up from how it's been and set the pace/agenda....get them to make a flag for their camp together etc and they may fight but say the rule is you must sort out little scraps/fights between you, I will be back in 20 minutes to test the den it should fit you both inside....etc, etc...
Hugs to you, it's hard this parenting thing, but you clearly care, little changes now will make a huge difference for the teenage years.....