Well that's the point, I can help you figure out what you need to improve, and then tell you how you can ^_^
That's actually one of her best moves. It's like a counter, press it at the exact time they hit you with a mid attack and she'll counter-grab and do a ton of damage, gaining some health in return.
As for changing stances, her BE moves i.e. 3A A+B+K or 66B A+B+K, all chance her stance, so if you're willing to spend the meter that's a good way to change reliably.
There are plenty of ways to keep a combo going after changing mid-way through :) Here is one example:
JS 66B, 66b BE to GS B+K
That can go two different ways. If the B+K headbutt turns you back to Jolly, follow with:
66B BE, GS B+K, 666B_BE
If it doesn't turn you Jolly after the first B+K, then just finish with 666B_BE
Both stances have completely different move sets aside from a few moves that are the same like 8B
You will need to remember different combos for the two stances. They are listed here, and someone even made an entire video to Jolly stance, it's fantastic.
As for your other question, Jolly stance does less damage and has less combo potential, so most people tend to stay in Gloomy for the majority of the fight. I can explain better in another post if you want me to.
Notations for moves if you don't understand those combos:
http://8wayrun.com/threads/basic-notations-and-terminology.58/
Combos:
http://8wayrun.com/threads/tira-combos.9910/