I can only imagine how poorly games will run if the Switch has to devote resources to Denuvo as well.

Pokemon Go added code obfuscation (I forgot the name of the company that provided it) some months after it was first released. Phones started running very hot, battery life dropped drastically, and people who played a lot had to replace their batteries (or phones) in a fraction of their normal lifetime. Also, as you imagined, performance dropped significantly.

I was a bit confused when you said local co-op. It implies 2 computers on the same local network

My friends call that LAN play or LAN co-op. To me, local co-op has always been a more general phrase, covering all of the above.