1. As far as I know, not really no. It's mainly a little bit of lore accuracy that the games hint at, and doesn't seem to do anything right now. fyi it's actually Nazrin's house, and she's kinda busy at the Myouren temple.
2. Having done all of the postgame bits, Letty is (currently) the strongest thing the game will throw at you. I haven't done the E4 again so they might have buffed the levels past that, but I'd have to test that to be sure. And again, they might add more stuff later that will pass that (I'm looking at you Flandere).