Try doing them in different coloured gel pens so that they stand out and maybe circle some of your note :)
A. The sentence works fine. one could argue B, but a colon is used to separate a run-on or show two complete thoughts in the same sentence, so arguably B would not work either.
It would simply be "They respect each other".
Respect in time tenses is either spelled, "Respected", "Respect", or "Will Respect."
The fact that it's third person does not change the word since it can be said as "I respect you", "You respect yourself" "They respect each other"