Yes M changes with how many players are at the table, and if you want to get real complicated it adjusts to when theres fewer players at the table called effective M. Basically if theres 4 players left, your M is effectively 4/9s of your M at a full table. I dont really calculate my effective M tho.

As for to use bbs to stack size or M, i actually use both. If im playing sngs i usually use M since the blinds and antes are small. In mtts i use M because of higher blinds and antes.