You can apply with both since your INQs will only count as one. I would not ask for any CLIs any of those cards. Just wait and garden. If you really need more credit, then after a year you could apply for another CC somewhere else. As a rule I would never ask for a CLI.
I would apply for both and go with the lower interest rate. I did the same and PenFed had slightly better terms so I decided to go with them.
I would disagree on not ever asking for CLIs. PenFed and Navy in particular are known for handing out huge CLIs when you ask for them. IMO having additional loans with these banks will not hurt your chance of CLI. As long as you are responsible with the credit they extend to you, then you are building a good relationship with them and they will give you higher limits and better rates.
took your advice and applied both. Got approved by both and Navy offered a bit of a better rate and actually approved me for 22k when I only asked for 20k. And here is the best part... No HP. They used the same pull from my CLOC I was approved for last week..