Question 1: Is there a way to create a 2-of-3 multisig wallet in Electrum in this situation?
I have created a 2-of-3 multisig wallet in Electrum when holding all the hardware devices myself, but not when they are all in different locations.
Yes, of course. As you noticed when creating the multi-sig wallet by yourself; while creating one you need the master public keys from the other two. The most convenient way would be for all three individuals to be in a remote meeting with each other, all create a multi-sig wallet, then share their master public key with the other two participants. It doesn't all have to happen at the same time, but it does make things easier.
For additional privacy I would want to use GPG to encrypt my master public key before sending it to the other participants.
Question 2: Is there a way to sign a transaction in a 2-of-3 multisig wallet in Electrum when all hardware devices are in separate locations?
Again, that's not a problem. One person can create and sign a transaction, save it to disk, and then share it with the other participants via email. One of the other two participants will import the transaction, and add the next signature. Once the required number of signatures has been reached, any of the participants can broadcast the transaction.