Hi!
In response to your first question, a team isn't necessary but is highly recommended, given the heavier nature of RPGs. By all means you can do a project on your own, but forming a team also gets you comfortable working in a team setting and if your end goal is to work in the industry, that will be more or less essential.
As for the second question, it's pretty much just saying you don't need a full game for a submission - as long as players can tell what direction the game is headed in and you've introduced the characters, it can be considered a game demo. With that said, this jam is very low stakes and you can submit whatever you believe is worthy of submission as long as it follows the posted rules.
- CG