Visa On Arrival Hainan and Shanghai

Part one:

This is a bit tricky to answer. Why? Simply because, although Hainan visa is existent and it functions, the airport staff from practically all airports, with the exception of Hong Kong airport, are more than reluctant to allow the boarding of passengers who have declared that they are flying to Hainan where they will apply for a Hainan VOA. So, if you intend to use Hainan Airlines flight from either Melbourne or Sydney to Haikou, which is very convenient way to reach this Chinese island, nobody can guarantee whether you will be allowed to board the plane or not. It will be up to an airport staff and you should be aware that they have a right not do allow you boarding because visas on arrival are never guaranteed. In reality, if you only manage to board the plane, a Chinese authorities will definitely grant you a Hainan VOA.

Having in mind all that I have written, you could maybe make a visit to the airport from where do you plan to depart for Hainan and ask an airport staff at check in if they are allowing the boarding of passengers that declare that they will rely on Hainan VOA. If you receive a positive answer, this would be great and that would be a solution to your entire Chinese trip because Hainan VOA covers also a travel from Hainan to all other parts of mainland China, including Shanghai, of course.

Part two:

It is also a solution to fly to Hong Kong and to take a flight from there to Hainan. Hong Kong airport staff is well trained, especially about all the aspects of travel to mainland China, Hainan island included. Anyway, if I were you I would make a visit to the airport and ask Hainan Airlines airport staff about this particular detail.

Now, about your questions:

1) Yes, you will be almost certainly asked to present your ticket out of Hainan at the moment you apply for a Hainan VOA.
2) As I have previously mentioned, a Hainan VOA is valid for 30 days and you are allowed to travel to other parts of mainland China with this specific visa. So, if you obtain a Hainan VOA, you are free to travel to Shanghai and to stay there up to 15 days.

Now, you will have to make an effort or to visit the airport to secure that you will be allowed boarding or to travel to Hainan via Hong Kong. Of course, if you find this solution via Hong Kong probably costly, maybe your best solution will be to obtain a Chinese visa in advance.