For the first question: Yup, that is the way it works, unfortunately. There's not really an easy way to do partial recipes, since for something like yellow belt (creates 2 belt, from 1 gear and 1 plate), you can't really divide the ingredients in half. In vanilla, this sort of recipe doesn't happen too often, I can only remember the yellow belt, underground belts, copper cable, and concrete, whose ingredient counts can't be cleanly cut by the result count.
For the second question: Unless I'm misunderstanding the question, that sounds like the disable productivity loop setting, that will prevent any items on the productivity module list from being recycled.