1. You are not forced, but it is strongly recommended. Using multiple languages on a single domain has historically been problematic, primarily because the application can forget if the user has selected a non-default language. However, I have seen some customer sites who have opted to do it anyway, such as Canadian sites who want one site for both French and English.
2. No, sessions are not preserved across domains. Customers choose their language by using the language selection widget, which transports them to another host (associated with that language)