Let me answer you the first question.
WAR file is a zip archive with different name. When you deploy this file to the Tomcat server, it unpacks this file to its folder as you would do it by copy-paste. If you are just developing your own project in your own environment and you don't want to distribute it, you don't need to create a war file. But if you want to distribute this project, I recommend you to create a war file. One file is easier to be sent.
Read more on Wikipedia http://en.wikipedia.org/wiki/WAR_%28file_format%29