They will only extend to the expiration date of the passport. So if applying for a 1 year extension and the passport expires in less than 1 year when you apply they will only stamp you to that expiration date. Personal experience. 😉
The US does require it to be mailed in as per the Embassy website and personal experience. Quite a few steps involved, I did a full write up of each step in a Chiang Mai group.
As James mentioned, India now gets 60 day visa exempt entry. Sounds like your colleagues have old info or tried entering before the new rule came into effect.