In sentence 1, I would prefer using past continuous (he was holding the hand ...), because using past simple will make it sounds like he held some white girl's hand habitually. (Note: If you change because to after, I think held will be more appropriate. It should also be even more appropriate than past perfect, in my opinion.)
To explain why using past continuous (or past progressive) is preferred, here is the closest entry I can find in Practical English Usage by Michael Swan.
422 past (2): past progressive (I was working etc)
3 past progressive and simple past: 'background' events
We often use the past progressive together with a simple past tense. The past progressive refers to a longer 'background' action or situation; the simple past refers to a shorter action or event that happened in the middle of the longer action, or that interrupted it.
As I was walking down the road, I saw Bill.
The phone rang while I was having dinner.
Mozart died while he was composing the Requiem.
In sentence 2, if you have this sentence alone:
Fans (queued/were queuing) overnight at a Hollywood music shop for the chance to get Lady Gaga's autograph.
I would say that either queued or were queuing can be used, depending on the way you want to narrate the scene. If you were a journalist writing it as a news, I think using queued would be more appropriate. However, if you were an anchor reporting the news, using were queuing would be more appropriate. This is because, according to my observation, TV news anchors usually use progressive tenses to arouse our attention, to make us feel as if we were in the scene of the news they are reporting.
However, when you gave the full passage,
Fans (queued/were queuing) overnight at a Hollywood music shop for the chance to get Lady Gaga's autograph. While they were waiting, Gaga saw their tweets. She immediately ordered 80 takeaway pizzas and sent them to her fans in case they were hungry.
I changed my preference to queued immediately. The reason is because it will provide the background (or the first reference time [ref.], if you prefer) for the whole story. Besides, there is already one use of the past progressive (... they were waiting, ...) as the main event of the whole story, which is sufficient for a news report.
If you are simply describing a single thing (the baby sleeping), then you would use
The baby slept peacefully through the night.
However, if you are going on to say something happened while the baby was sleeping, then you would use the other
The baby was sleeping peacefully through the night when her parents accidentally locked themselves out.
About your second question, it's perfectly grammatical (and doesn't sound crazy) to say
She has worn short hair for two years.
Using "worn" to describe a hair style sounds a bit old (like 1950's old) to me and this isn't the most common way to say this. If I had a friend in this situation, I would say
She has had short hair for two years.
or possibly
She has kept her hair short for two years.
Best Answer
The sentence you received with I was talking about is perfectly idiomatic. The past continuous there refers obliquely to your earlier conversation in which he described the problem. It bears the added nuance that now you have in hand something which will help you to understand my earlier words more completely.
As you say, "phoned ... then he sent me an email".
Compared to the simple past told, the continuous was telling puts a little extra emphasis on the durational act of telling, as distinct from an incident without duration. Thus, it might be paraphrased "as I assume you do remember from our recent conversation, which should not yet have shrunk down to a mere dot in your mind" as might well happen with the passage of time. With time, you might remember only that you two had spoken but not the conversation.
The continuous implies that the speaker fully expects this matter to be fresh in your mind. He expects you to remember the conversation. For that reason, the simple past is not better.