As for the algebra questions:
Yes, taking quotients is functorial in the right sense. You can consider a category where objects are pairs $(N,G)$ of a group $G$ and a normal subgroup $G$ of $N$. A map $(N,G)\rightarrow(M,H)$ is a group homomorphism $f\colon G\rightarrow H$ such that $f(N)\subseteq M$ (so $f$ preserves the subgroup). There is a functor to groups mapping $(N,G)$ to the quotient group $G/N$ and $f$ to the map $\tilde{f}\colon G/N\rightarrow H/M,\,gN\mapsto f(g)M$. This is well-defined, precisely because $f$ maps $N$ to $M$. Note that chain maps commuting with the differentials…