I assume question 1 is about private keys. The answer is that they can be encrypted if you use the encryptwallet command, but this is optional.
As for the modifying the node's wallet, you should not do this while the node is running. If you want to be brave, you can stop the node, remove wallet.dat, and then restart the node with the -rescan option. This will of course lose all your private keys and any assets that were associated with them, so consider carefully.