1. Can I travel to US on my current Visa(Company A) with employment verification letter and show the LCA which is has a old client location? He basically wants me to come and try for new contracting positions for different clients.
You need to have a confirmed job with your present employer, if they agree to travel, you may travel.
2. The reason I was in India for 1 year was because of health issue and if asked in POE I can show him the medical records.
But if he asks for the client letter I do not have one to show him except the LCA(on client location). What are the issues I can face at POE.
If you have last pay statements and an employment letter (Continutation), you should be okay.
3. What if at the POE, my visa is cancelled. Will that effect my chances for future h1 or h4 process?
If it is cancelled without prejudice, you will have less trouble in future for reentry
4. Instead of taking risk, My spouse is on H1B. Can I convert to H4 and ask Company B to file H4 to H1B on my I-140. Is this is valid scenario?
Yes. This is the best option.