The furnace exhaust pipe (2 inch PVC) currently comes straight out of the back of the house about one foot. Can a 45 degree elbow be added to the end to vent it either up or down without causing any problems? Also, does it need to extend out of the back of the house by a certain number of inches?

First follow the manufactures instructions all the questions you have are contained in them. Each brand of furnace is a bit different.