Any thing taller than normal will not fit. If I was buying a keriug again I'd get the larger size, plus it's a pain always measuring the EXACT amount of water to fill the tank for a full cup, plus dumping the water into the tank is prone to spills outside the tank, get the larger size! You'll be happy you did.
Yes, if it is instant soup. You just press either the hot water button if available or the right size cup. Soup can be made by all brewers by selecting the right cup size. Can also make instant oatmeal.