$\DeclareMathOperator{\G}{G}
\newcommand{\fraka}{\mathfrak{a}}$To your first question, yes, the associated graded $\G_\fraka(A)$ is always generated in degree 1 over $A/\fraka$ since by definition, the elements of $\G_\fraka(A)_n=\fraka^n/\fraka^{n+1}$ are products of elements of $\G_\fraka(A)_1=\fraka/\fraka^2$.
For your second question, we can make the isomorphism $\varphi:\G_\fraka(A)\to k[x,y]/(y^2)$ explicit (I will abuse notation and use the same variables $x$ and $y$). This follows Milne's AG notes. Let $I\subset k[x,y]$ be any ideal and $I^*\subset k[x,y]$ the ideal generated by the initial forms of $I$, which in this setting just means the lowest-degree homogeneous term. Set $\fraka=(x,y)$. Then
$$\begin{align}
\G_\fraka(k[x,y]/I) &= \bigoplus_{n\geq 0} \frac{(\fraka+I)^n}{(\fraka+I)^{n+1}} \\
&\cong \bigoplus_{n\geq 0} \frac{\fraka^n+I}{\fraka^{n+1}+I} \\
&\cong \bigoplus_{n\geq 0} \frac{\fraka^n}{\fraka^n\cap (\fraka^{n+1}+I)} & \text{(2nd isomorphism theorem)} \\
&= \bigoplus_{n\geq 0} \frac{\fraka^n}{\fraka^{n+1}+(\fraka^n\cap I)} & \text{(modular law)} \\
&\cong \bigoplus_{n\geq 0} \frac{\fraka^n}{\fraka^{n+1}+I_n}
\end{align}$$
where $I_n$ is the degree $n$ homogeneous part of $I^*$. This last isomorphism follows since any element of $\fraka^n\cap I$ of degree $\geq n+1$ is already being killed by $\fraka^{n+1}$, and everything else belongs to $I_n$. But now we can identify $\fraka^n/(\fraka^{n+1}+I_n)$ with the degree $n$ homogeneous part of $k[x,y]/I^*$ and we're done. Note the same proof works for $k[x_1,\dots,x_r]$ and $\fraka=(x_1,\dots,x_r)$.
For a principal ideal $I=(f)$ in a polynomial ring, we have $I^*=(f^*)$. Thus $\G_\fraka(k[x,y]/(y^2-x^3))\cong k[x,y]/(y^2)$ under the above isomorphism.