Can an existing region be expanded, or do I have to request a new region to be made that would be right next to it?

They can be expanded. Just mark the area with wool towers or similar, and open a PE facing the direction you want to expand and say "I'd like to get region <regionname> expanded to the wool towers in this direction."

Sorry I have another question. I'd like to make the region into a town with actual plots and such. Do I just make a PE for the change?