I think "scale-down" is the closest to what you're after. If you have a 400x600 original, and request 512x512, you'll be served a 341x512 image. This maintains the original image's aspect ratio, and a fits within the requested (512x512) size.
Absolutely possible! If you've just got a folder of static assets, you can connect it up to Pages, and enter that directory as the "build output directory".