Breakdown of Η φίλη μου γελάει και λέει: «Λοιπόν, θα πάρεις και χαρτομάντιλα ή μόνο χαρτί υγείας;»
Questions & Answers about Η φίλη μου γελάει και λέει: «Λοιπόν, θα πάρεις και χαρτομάντιλα ή μόνο χαρτί υγείας;»
μου is a weak (clitic) form meaning my. With nouns, it typically comes after the noun: η φίλη μου.
η μου φίλη is possible but has a different, more emphatic/contrastive feel and is less neutral in everyday speech.
Yes, γελάει = (she) laughs / is laughing (present).
γελά is also correct and common; it’s essentially an alternate present form. Many verbs in -άω / -ώ have two everyday options (shorter vs. -άει/-εί forms), and choice often depends on style and dialect.