Are the terms/requirements/guidelines for a conventional/conforming Rate and Term refinance different than a cash-out refi? 

It appears that the 3 unit property would at best be legal non-conforming depending on the year that it was converted to 3 units.Perhaps @Dorothy Ma is aware of the situation you are considering and can comment in more detail.

I've exhausted my conforming Fannie/Freddie backed loans (10) so the deal numbers must be better than every deal I've done to date to work at commercial/portfolio loan interest rates and shorter amortization periods. 

As mentioned, your only conforming residential loan option is an "investment" conventional loan since you are not occupying the unit.Your only other options would be to get more creative with a "commercial loan" which is effectively much less regulated. 

Financing wise will also be tough, will have to go commercial based on the non-conforming use.

I prefer to flip properties locally (Baltimore), but do flip houses, commercial and non-conforming properties in ither states. 

Perhaps try to find a non-conforming duplex or a house with a separate entrance, where you can build out.

Conventional/conforming (I'm not sure if there's a difference) with 5% down.

The only thing that jumps out to me is the non-conforming bedroom.  

My second thought was how much I would hate to be across from a school if I were renting it - the noise level and the periods of high traffic in the area would be downsides I'd be sure to mention in a review.My advice would be: if you want to move forward with it, look into the local laws re: convicted sex offenders to make sure you can conform to them, and prominently disclose in your listing that you're across from a school.