1. What is the difference between using "NA" and #NA?
#N/A is a "reserved value" like built-in function names that Excel immediately recognizes and knows what it means.
2. How does the count formula differ from what I am using?
Your formula just checks the first cell (C25) of the range (C25:C49) that you feed to the AVERAGE function. The formula with the COUNT test says that if there is at least one number in the target range, then compute the average, otherwise return #N/A. Note that I asked you whether this was what you intended with "no data". Yours doesn't check for that.
3. I will create a dummy spreadsheet and try your suggestion...
Good idea. That would clarify things we probably didn't consider yet...
4. I have used the type of formula above in many spreadsheets, works well. Does not appear to work with graphing, why?
Which formula are you referring to?
Aladin