A simple call to the BATFE NFA branch (304) 616-4500 will clear up all of your questions, and get you a few corrections to the misinformation here.
On the Form 1, in the context of an AR-15 platform SBR with various uppers, you only insert ONE combination of cartridge, barrel length, and overall length. Once the paperwork comes back, you ARE required to notify in writing any modification to the NFA Firearm which changes one or all of those 3. It's not an approval process, just a notification process. We have the luxury of the honor code in this system - nobody comes out to check on these modifications as long as you don't deserve a housecall - but if a guy gets caught with an SBR in a form which isn't listed on the Form 1 and which wasn't recorded in notification, there's some hot water to be found in. The pain in the butt part is that if you have multiple uppers, technically, you have to send word every time you swap. It's a little grey, in that if you convert it to a non-NFA configuration with the intent to convert it back, a guy doesn't have to notify, but I tend to do so anyway. There's also a little grey in that a guy could convert it to a non-NFA configuration, at which point you're free to transport it across state lines without approval, bring it back and convert it back. I'm not complaining, as the ambiguity tends to favor our side, and modification to the law to better clarify some of these nuances would most certainly simply end in greater restriction overall - which isn't what any of us would want.