If a player is involved in a trade which has already been accepted by the other team but is waiting on league approval, can this player be DFA'd instead of just being "rested" so that he is protected from injury for the trade partner? DFA'ing the player would allow me to go ahead and fill the line-up spot instead of being short-handed while the trade goes through.

Yes, I do this when I'm trading a player on my ML roster and the player(s) I'm getting back will not be placed on the ML roster. Just make sure you when designate you choose the "no waivers" option.