Even at the time, the question was problematic. The United States, as a matter of foreign policy, had made the strengthening of China a priority well before the actual Japanese invasion of Manchuria. The Japanese invasion of Manchuria infuriated the United States and helped unleash a chain of events culminating in the American economic sanctions that the Japanese used as pretext and justification for Pearl Harbor.

Despite that, the conflict did not become international until the onset of world war II. While there was violence that occassionaly spilled over - the sinking of the Panay - they were limited in scope. Perhaps if the Panay had led to immediate war, the Sino-Japanese war would be considered the same as WWII, but it didn't and isn't.

When the US formally declared war in 1941, it was on the basis of Pearl Harbor not China. Therefore they are considered separate (but linked) events.

Your other question about China being considered one of the allies, this was also contentious. The United States pushed repeatedly for China's involvement, while the UK was skeptical. Ironically on France, the positions where opposite - the UK pushed for more French involvement, while the US was skeptical. Ultimately the final and most important outcome of membership as a allied power was a position on the United Nations (which is the formal name that Roosevelt used for the allies during parts of the war) security council, which was negotiated during the war. Both France and China made the list.

China was considered an ally hence their permanence seat on the UN Security Council along with the other major allied powers: USA, France, UK and USSR/Russia. Their was some issue though since China itself was in a civil war between the communists and nationalists at the start of the war as well as for years after the end of WW2. Some people do consider the start of the 2nd Sino-Japanese War as the start. that was a regional war though where as the invasion of Poland brought the UK and France into the war along with their empires which covered much of Africa along with Canada, Australia, New Zealand, India etc. You could argue it wasn't really a world war until December 7 1941 which saw America enter the war along with the Japanese invading European held Asian territory thus connecting the Pacific front and the European ones. It's really just a matter of choosing when you feel the term best applies.

1939 is generally considered to be the start date of the conflict because it was at that point that multiple powers were at war (UK, France, Germany, Poland). The Sino-Japanese War was, as the name states, between China and Japan, despite the fact that Germany, the Soviet Union, and the US were involved to some degree on the Chinese side.

As for interesting stories about the war, I have a few...

One of the direct causes of the 2nd Sino-Japanese War was the Japanese annexation of Manchuria in the Mukden incident of 1931. One of the prime instigators was an officer named Kenji Ishiwara. For his work in the incident, he had expected to be executed for violating orders, but he was instead promoted, and became vice chief-of-staff for the Kwantung Army. Once there, he rapidly grew disillusioned with the IJA presence in China, and became one of the few outspoken dissidents against Tojo and the 2nd Sino-Japanese War, culminating in his forced retirement after demanding Tojo be executed for treason. Talk about an about-face!

In the battle of Kunlun Pass, the Nationalist Chinese deployed a fairly large force of Soviet and Italian tanks to rapidly encircle and wipe out a Japanese force. Amusingly, this might be the only instance of Italian tanks winning a pitched battle without German support. Unless you count the German equipped infantrymen, at least.

While the Marco Polo incident is typically seen as the moment when the 2nd Sino-Japanese war started, the war itself did not truly begin until Nationalist troops attacked the Japanese "marines" (which were really more ground troops attached to the Navy) in Shanghai. Actually, the attack on Shanghai was a questionable idea. Von Falkenhausen, the German military adviser to Chiang Kai-Shek, advocated a strategy in line with German defensive doctrines-namely, to pull back troops behind a massive defense line between Shanghai and Nanjing, which was heavily fortified and likely would have made the Japanese losses even steeper than they were in real life. However, Chiang felt that the only way China could win was with external intervention. Many foreign nations had concessions in Shanghai, and he felt that by "bringing the battle" to them, he could get their intervention. Alas, the gamble failed.

Hersham's Shanghai 1937: Stalingrad on the Yangtze provides several good stories about the Battle of Shanghai. In addition to the 400 heroes of the warehouse, there's also a bit about the the Japanese cruiser Izumo, which was a 19th century rustbucket that was basically the IJN's way of saying "we're helping." That lone cruiser provided enough naval artillery support to stop the Chinese troops from overrunning the Japanese marines. The Chinese tried to sink it many times, via divebombers, torpedo boats, onshore artillery, and I believe at one point the use of frogmen was considered, but all failed. That cruiser would survive until the remnants of the IJN were wiped out at Kure Naval Base in 1945.