Please, if you can, explain me some details about translations.

1.Недавно они были хорошими друзьями, но сейчас они видятся гораздо реже.

I translated it as:
Resently they were good friends, but they have seen much rare now.
But is it wrong? I was corrected:
Resently they used to be good friends but they have been meeting more and more seldom.

What sentence is more correct?

2.Мы знаем друг друга с тех пор, как учимся в одной группе.

What sentence is correct?
- We have known each other since we have studied in the same group.
or
- We have known each other since we have been studying in the same group.

Please explain me this!
Thank you.