Swiss Train Passes

1. No.
2. Yes, you would get the Swiss portion eliminated, but if you bought an advance discount nonrefundable ticket, probably not as the price of the discounted ticket may be less than the whole Swiss portion.
3. No, it can be bought in Switzerland.
4. Cheapest way is to buy in Switzerland, or over the internet with a print-at-home pass. Buying through agents like Rail Europe there will be fees and mailing costs added on top of the pass cost.

Thank you. Really appreciate your prompt and informative replies.

Most people would suggest that you not base in Zurich at all, unless you have business to conduct there or family to visit. Aside from being somewhat on the bland side (though perfectly pleasant), I think you'll find hotels even more expensive there than in most other Swiss cities.

If you tell us what side-trips you're contemplating, I'm sure we have folks here who can suggest other options for your second base.

Yes. You’re right but my travel companion needs to be in Zurich, so for convenience, we’ll stay there for a bit. Thank you for the suggestions.

We’ve been to Lucerne, Lausanne, Geneva, Berne and Interlaken and visited many of the usual tourist places like Jungfraujoch ... For this trip, we have not made any specific plans yet hence the travel passes which us allow to go where we please. Perhaps not the most organised approach ...so we’re open to suggestions how we can enjoy some easy nature walks and basically relax.

A Swiss Travel Pass or Half-Fare Card doesn't cover the majority of the trip from Frankfurt to Zurich, and the 8-day consecutive pass doesn't cover your stated 9-day visit. Also, if you're continuing to Wengen on the same date, the fastest connections are via Basel, not Zurich. You can buy the Frankfurt-Zurich or Frankfurt-Wengen ticket in advance from DB for as low as 40 euros, if your timetable is firm.

Thank you. Travel dates are not yet confirmed. Will check you suggestions

Agree with all the above.
The shortest and quickest route from Frankfurt am Mian to Wengen is NOT via Zürich, it is via Basel.
A Swiss Pass covers you from Basel. You would need to get an advance purchase ticket from Frankfurt to Basel.

Edit:

Then the balance 5 days based in Zurich for day trips out.

I would avoid Zürich altogether. It is not in the mountains, and not a good location for trips. Investigate Luzern instead. Or split the 5 days and do a circuit including the west-east Glacier Express route (Brig - Andermatt - Chur).
It partially depends on where you need to end up to exit Switzerland, as per above.