1)
What are the connotations of not entering into a covenant "with them and with their gods"?
1.
Ramban #1: It is a prohibition against leaving any Cana'ani alive and any of his idols intact.
2.
Ramban #2: It means not entering into a covenant with them to keep them alive - as long as they adhere to their gods, but not once they relinquish them.
3.
Oznayim la'Torah: It means that in case you say that you will make a covenant with them - for the sake of peace, but not with their gods; 1 therefore the Torah informs you that a covenan with them is synonymous with a covenant with their gods.
1
Oznayim la'Torah: Like Sh'lomoh ha'Melech said 'I will mary more wives and I will not sin!'.