I’ve always read hardware to mean the console itself and software to mean the games when it comes to consoles. So I would expect the games to be playable whether they are digital or physical games. I’ve seen nothing to suggest Nintendo want to go the digital only route anytime soon.
From what I remember reading, yes there is some added content from the books that is not in the musical stage adaptation. I think it’s more of Elphaba’s childhood (which is quite a bit in the book).
Also remember reading that one of the reasons they decided to split it was because they couldn’t find a reasonable way to move on after “Defying Gravity” (This is the big number before intermission in the musical and really does feel like the end of that chapter) to the next scene in the film, so they decided to split the films too. Not saying it was the best way to go but maybe it means they can add more book related stuff to the second half too. The musical is sorely lacking there too.