2. You most certainly can breed her. I would recommend finding a male that is not fawn factored, if possible, along with looking at her as an adult to choose a mate that will "better" her progeny. Color is really secondary. The only thing you won't be able to do is show her in conformation.
3. Grain free something. the nice thing about Dutchies at the moment is that they don't seem to be as sensitive to feed as the German Shepherd.