1. When wearing a cock ring, each time i take it off and on (every 20mins or so) should i be erect each time i put it back on?
You don't have to take the ring off completely if it's not uncomfortable for you. The key is to squeeze the blood out completely to cycle in new full volume of fresh blood after 20 mintes, 30 minutes, or even 40 minutes.
You can put the cock rings on when you're flaccid or erected. Your choice. However, once you put the rings on, make sure to get an erection to get the full blood volume back in. You don't have to remain erected. Just get the full volume of blood back in.
However, be warned that if you place a restrictive blood flow from 70% to 90%, make sure to cycle a full blood volume in after every 5 minutes, or 10 minutes max. If you're restrictive flow is less than 70%, you can go up as long as 40 minutes, but use the practice of every 30 minutes for safety reasons.
2. When completing 5x5x3 routine, would it make a big difference if i completed first two sets together and then the 3rd set a few hours later, or is it better altogether?
There are many ways to answer this questions. If your penis is kept at an expansion state after the first 2 sets, then the 3rd set a few hours later is quite beneficial. If you don't keep the penis at an expanded state, then this is a lost of benefit.
The second round to this is, if you divide 5x5x2 once in some hour of the day, and later, you do another 5x5x2 hours later, then yes, you can get a full benefit from that.