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Calibre can manage DRMed (encrypted) ebooks, but it can't convert them to another format. In the case of MOBI lending library ebooks it is possible to read them on the Kindle using the script kindlefix.py, which does not remove the DRM. You can also remove MOBI DRM using mobidedrm.py and ePub DRM using ineptepub.pyw.
The Kindle notes (and clippings) are stored in a plain text file, so these are in principle portable to a non-Kindle. However, the Kindle's address scheme for where the note is placed in the ebook is specific to the Kindle.
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