It’s not unheard of to query before you finish your manuscript. This is one way to lessen your waiting time between query and response. You’re not really waiting if you’re still writing, right? However, while the logic is there, there’s risk in this maneuver. Should you get a speedy reply asking for materials, you wouldn’t have anything to send and would have to hem and haw or make up excuses for your delay. Or worse, you’d rush out with something before it’s thoroughly cooked. Leaving a request for more dangling is always a little hinky. The agent may wonder if you’re flaky or not as serious about him/her as you claimed to be in the query, and the last thing you want to do is give agents a reason to narrow their eyes suspiciously. Most writers send in their material within hours or days of the request for more. If you’re going to query before your manuscript is done, make sure the ms is really really darned close to being done.
If the editors you queried for your picture book also handle MG fiction, then yes, query them for your novel. They didn’t reject you, just that particular picture book.