loadMacros("contextFraction.pl"); Context("Fraction"); $r = Compute("4/6");in the Interactive PG lab, you will get 2/3 as the output, not 4/6. There are flags that control the reduction of fractions, and other output features, like whether to show mixed numbers or improper fractions.
For student answers, the reduction is turned off automatically, so when you use
studentMustReduceFractions => 1, their fractions aren't reduced by default.
See the documentation for the Fraction context for details.
So in terms of (1), you can just create a Fraction object and include it in your
BEGIN_TEX/END_TEXT a you would any other MathObject, and it will format the reduced fraction automatically.