first question:
Depends on the Drafting Standard you are following. I believe ANSI and ASME standards require the same number of decimal places on the dimension and it's tolerance. Not sure about ISO, but I know ISO doesn't include trailing zeros (so I guess you can have difference decimal places). Whichever way your company decides to do it, your CATIA Administrator will have to customize a standard in CATIA.
second question:
As you said, the Selection Mode allows you to define if you want to select the entire dimension system or only a sub-set of dimensions. By choosing, you can modify the entire system, or just a few dimensions; for example; change decimal places on all dimensions, add tolerance, delete entire system or just one dimension.