Hello,
1. Yes it's possible, see Start/Stop pace car mode here http://www.pclapcounter.be/slot_it_oxygen.html, but it's not possible to apply a yellow flag from the hand controler because at this moment the oXigen dongle not send any informations on the BRAKE or LC buttons.
In this video you will see a example of Yellow flag by using Phidget interface
2. I made it for Scalextric C7042 but at this moment that feature is not available with oXigen, i will do it for oXigen in the future (the dongle send enough information to implement that feature).