I am not expert in WCF, but from what I read, you have 2 problem:
you don't want the development connection string to be on the production config file: to solve this, there is something called config transformation which essentialy change config setting when compiling your project. read:
http://www.codeproject.com/Tips/559849/Transform-Web-Config-when-Deploying-a-Web-Applicat
edit: above work for website application, if you need wcf to have similar function, checkout http://www.hanselman.com/blog/SlowCheetahWebconfigTransformationSyntaxNowGeneralizedForAnyXMLConfigurationFile.aspx
Is it possible to dfine service programatically? have a look: http://msdn.microsoft.com/en-us/library/hh205277(v=vs.110).aspx
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