Yes, oracle create standby archivelog file at standby in LOG_ARCHIVE_FORMAT because by default data is written to standby redo and then archived to standby.
1) Does Oracle create standby archivelog file at the standby site based on the format specified with LOG_ARCHIVE_FORMAT? If FRA is on, then oracle ignores the format specified with log_archive_format parameter and creates the archive log files on it's own. Right?
Because as said above, data from primary is written to standby redo and then archived. So, archive log mode is required.
Why do we need to put physical standby in Archivelog mode? Is it only because of switchover/failover?