I want to install Time Machine on my wife's Macbook but she mainly likes to carry it around with no external drive attached. What if every so often I plug the drive in for awhile -- will TM then bring the backups up to date?
Yes, if TM is set to run every hour, it will automatically update the backup once the external drive is connected, even if it's been awhile since the last backup. You can also manually start a TM backup via the TM menu item. In any case, it may take awhile to finish. I would use the TM menu item or system settings window to ensure the backup is completed before ejecting the drive.
Question 2: If her Macbook "dies," but the TM backups are "safely" on the external drive, is there a way to access that drive's contents with her subsequent new Macbook?
Yes, a new Mac will be able to access the TM drive's files. You can use Finder to drag and drop individual files or folders, but in a "new Mac" scenario you are more likely to want to use Setup Assistant (during the new machine's setup) or Migration Assistant (after setup) on the new Mac to copy her user account and data, and optionally applications and system settings, to the new Mac. It's pretty painless, typically. The setup procedure on the new Mac will prompt you to connect a Time Machine backup at the appropriate time.