No. Formatting and validation both happen entirely in your browser using JavaScript's native JSON.parse and JSON.stringify — nothing is sent to a server.
The error message includes the exact position where parsing failed (from the browser's native JSON parser), which usually points right at a missing comma, unmatched bracket, or trailing comma.
Yes — use the Minify button to collapse the JSON to a single compact line, or Format to pretty-print it with your chosen indent size.