Got my reference number from Key2Persia in 6 working days. Perfect service.
Embassy only takes applications from 2 to 4 pm on Mon Wed and Fri. The sign at the gate says the old opening hours (9-13) but dont get confused. Just ring the door and it will open. Went there with :
Receipt for payment from Mellat Bank (5a Tumanyan) - 75 euros for express service.
Insurance certificate (it was asked) bought for 14 usd at Tatev travel agent near Mellat bank (see below for more info)
Passport photocopy
Photo (3.5 by 4.5)
Got a number. Waited 15 min for other 4-5 people to be done. Lady spoke decent English. She was a bit confused that I did not know my reference number and it seemed a bit difficult for her to find me in the list (it was quite long and it seemed she had limited experience with foreign names). She found me though. Make it easy on her and print the pdf from Key2Persia.
Filled the form, she was nice to check and correct (I did not know the name of the border crossing with Armenia).
Was told to come back on Wednesday. I said please I paid for express service and all people who applied here before told it meant next open day (Monday in my case). She said no next 2 days, that means Wed (no visas on Tue and Thu). I said is it ok if I come back on Monday to check and she said why not.
Will let you know what happens on Monday

EDIT :
Went to the embassy today (Monday), got a number, waited my turn, showed the receipt. The lady said "your receipt says Wednesday" and I asked if she could check maybe it is already processed. 5 min later passport handed with Visa. Iran, here I go

All and all, if you can apply in Tbilisi do it, as I heard its easier cheaper faster (50 euro same day no insurance)
Some more info :
I had bought travel insurance (they do ask for it, and as I read above they wont be fine with you saying you will get it at the border) from Tatev travel agency (https://goo.gl/maps/HurKsvN9axN2). Its 5 min away from Mellat Bank (the bank where you have to deposit the money for the visa fee). Insurance is tailored for the visa application (6 month validity, 30 days coverage), 6600 AMD (roughly 14 usd as I speak, although they asked for drams). I had audited another agent offering 18 usd, others I found online started from 22 usd. Off topic, Tatev travel agency also make MoFA reference number for 35 euros. If you dont have paypal for Key2Persia and dont want to ask a friend's paypal, its pretty good, otherwise I can only recommend to use Key2Persia and support caravanistan at the same time.
As for transport, 5 min walking from Mellat to Rep Square 5 min metro to Barekamutyun (3 stations north) and 15 min walk to the embassy.
If you need to print photos, theres a print shop next to Barekamutyun metro. https://goo.gl/maps/gZ2dPXuyeZz its on the basement level, big XEROX sign.
60 dram for a 10 by 15 glossy (can easily fit 6 id photos on that, even the big ones for indian visa). 100 dram extra charge if you dont have it on a pendrive.
Also for Key2Persia I didnt have paypal, no credit cards, and my friends are all hobos who barely know paypal exist. I opened a bank account in 15 min and got a VISA card for 1 Lari in Tbilisi (TBC Bank). The card was to be picked up 2 days later. I put the money on it, made the payment, closed it 2 days later, they didnt budge

There was an issue with Key2Persia where their paypal payment page didnt show my paypal-linked debit card. I emailed them and they sent an invoice to my paypal address 10 min later, problem solved.