1. The question is why you won't convert extra frag to chakra. As bad as the conversion rate is, the thing is, the frags are completely useless, so why not do it?
2. It depends on the activity of your group. If the activity is relative low, and the chakra is "full", instead of feeding it now (which will result in gaining exp and thus level up, I believe) you might want to hold back to ensure that, after the "tax" is taken, it can be full the next day (and days after that). For any group with a sufficient amount of active member such that that will never be an issue, this is obviously not needed. And for any group with such low activity that it's rarely full, also not a problem. Only a few borderline ones who can barely keep the snake full might need to worry about this.

statistically speaking, unbalance will happen, and given enough time, it can change direction (thou the change becomes less frequent as time goes on, roughly exponentially slower).
So generally speaking, doing only sets is probably the best option until such a point one specific element reach a point where reversion is extremely unlikely, then you can safely do a few singles.
Thou as I don't know if you get to choose which element to offer if you do singles, it might be difficult for you to "aim" the thing (you can trade away all other elements to do ensure only the excess one gets consumed)

The threshold for one element being excess enough to trade away, IMP, is at least 20 per active player more than the least common element. So if, for example, your group have most fire and least lightning and have 20 active players, it means 400 more fire than lightning in the group as a whole. At this extend of unbalance, the amount of time for fire to possibly become the rare element (thus "regret" the decision) would take probably at least half a year. if we go to 40 per person, it would take around 2 years, which might be longer than the potential lifespan of the game.

So yes, there is a point at which you can trade away certain single element excess, but the threshold for that, if you plan to play long term, is pretty high.

Server
thou it might display as local for some players, but server.