1) They might find books from their world in the library, but there won't be anything written about it as from an outside perspective. In terms of fourth walling, however, they will conveniently not find any works of fiction involving characters currently in game.

2) Character mounts can live where ever characters would rather keep them! Stables, recruit rooms, and the lake is all fair game, no one is enforcing it. They can be part of the activity if you'd like to volunteer them for it!