|Hmmm, I've only very rarely had covers that smelled funky and that was when a wet diaper sat in them for a long time. Try soaking in warm water and baking soda to remove the smell. All I can suggest is what you're already doing, especially not storing with diapers. I wouldn't say my covers smelled 'fresh' after a whole day of wearing but they weren't badly smelly either, certainly nothing that could be noticed unless someone had their nose right up to the cover. Some people rotate 2-3 covers, rinsing them quickly under the tap after each wearing and then hanging to dry. You'd be rinsing away most of the urine so that might help and you may be able to wash less often as well.
As for the yellowing, there's not much to be done about that at all. Just a normal part of the 'aging' process I'm afraid. I have noticed that colored covers don't show the yellowing, so maybe consider getting some of them...