@Mum2Can - here below my responses based on my understanding:
Regarding H1B visa holder travelling back to US based on Canadian Passport+ I797 will help to get I94 based on Candian Passport.
>>> Yes, the process is same, border control will issue new I-94 based on Canadian passport and valid I797 (in my case, they checked my prev. stamping in India passport)
1. Does process will be same (CAN Passport + Primary Applicant I797 Approval Notice) for spouse who holds H4 Visa and now Canadian Citizenship?
>>> Yes, process is same for both H1B and H4
-- great, this helps.
The same process applicable to H1 extension also, no stamping needed at any given time for Canadian passport holders. Only valid approvals are needed.
-- Ohh that's great to know.. stamp free tavel