Noticing Newbies

Okay, so i have this character Sophie, whom i have wrote 3 short stories about. I love her as a charater, because she is so different, and i'm planning to turn her into a novella. here is what i need help with.
1) should i write 1st person or 3rd.
the reason i ask is, i wrote all teh short stories in 3rd person, however, i write better in first. Then i thought, well becuase her character is the following -delusional
- phycotic
- in her own bubble
and other stuff. Sophie thinks her friends are alive, but theyve benn dead for 6 years and she thinks only a year has gone by.
If i write 1st person, too much will be given away about her head, and you can see other people perspectives aswell. She thinks everything is perfect, its not.
1st person is good to get inside her her crazy head, but it clouds your image of the other character
3rd is good pecause its what ive already wrote in, and it works more from a plot line point of view, but im better with 1st person.

-opinions?-
2) can novella's have chapters?


Thanks, Midget!