1. Changing the connection string to sa won't help you if you don't know the password. I would suggest looking at two things:
Adding your login to the SQL instance by running SSMS as a local administrator
Ensuring allow remote connection options is turned on. By default MSDE/Express versions this option off and you will not be allow to connect removely.
As far as connection strings, check out
http://connectionstrings.com/ for sample connection strings.
2. This works fine for me as far as executing two queries, do you want to execute both queries in a single pass?
$con = "server=ipaddress;database=master;Integrated Security=true"
$cmd="SELECT * from tablename1"
$da = new-object System.Data.SqlClient.SqlDataAdapter ($cmd, $con)
$dt = new-object System.Data.Datatable
$da.fill($dt)
$Reslut = $dt| out-string
$cmd="SELECT * from tablename2"
$da = new-object System.Data.SqlClient.SqlDataAdapter ($cmd, $con)
$dt = new-object System.Data.Datatable
$da.fill($dt)
$Reslut = $dt| out-string