-요 marks the casual-polite or everyday polite style (해요체), appropriate for most conversations. -습니다 marks the formal-polite style (합쇼체), used in speeches, presentations, news broadcasts, or very formal writing.
Examples:
• 해요체: 이 책이 예뻐요
• 합쇼체: 이 책이 예쁩니다
• 이 책이 예뻐요 uses 이/가 to present “this book” as new or focused information (e.g., answering “Which book is pretty?”).
• 이 책은 예뻐요 uses 은/는 to set “this book” as the topic or known context, often implying contrast or general statement (“This book is pretty (but that one is not).”).
Yes. Remove -다 from the dictionary form, then add -아요/어요 according to the last vowel of the stem:
• 크다 → 커요 (big)
• 좋다 → 좋아요 (good)
• 작다 → 작아요 (small)
Stems with ㅏ or ㅗ take -아요, others take -어요 (with contractions as needed).