This maybe a dumb question but here goes I just ordered expansion pack 1 & I see there's Realfight add-ons vol 1-5 can both of these be used on G3 what's the difference in a expansion pack & a add-on .Thanks

Yes you can use the add on's as well as the expansion packs. The add on's were written for g2 but are backwards compatable, expansion packs are G3

Regarding multiplayer.

I was hoping to be able to hook up my G3 controller and my usb G2 controller to the same box and have two people fly at the same time.
Is this possible? Or is the multiplayer strictly for online playing?