One more question - if a bullet with m & velocity known is fired at two blocks, why is momentum conserved?

Here the bullet losses some momentum after hitting the first block. But momentum is not lost because every bit of momentum that the bullet the block gained. That block when then lose that momentum to friction which produces random kinetic energy in molecules of whatever is causing the friction. The last bit of momentum of the bullet is given to the second block and since the bullet is lodged inside that momentum is shared between them. There is no simple physics equation to determine how much momentum the bullet will have after striking the first block, but the total momentum of the system is constant and easily calculable.