DeLonghi Silver Compact ECAM23450S Questions & Answers

Absolutely.

Yes, both

you dont put chocolate powder in the compartment but
you can add chocolate powder to the frothed milk
and you can also use the hot water only function as well.

You add chocolate powder to your cup. From there you have a choice of milk or water. If milk, moisten the chocolate powder in your cup, connect the 'jug' with milk to the machine, then press the Cappuccino button twice and you get frothy hot chocolate.
If water, place your cup containing chocolate powder under the tap gadget, press the tap button and hot water flows. You get ordinary hot chocolate to which you can add milk and/or sugar to taste.
You can do this to that powdered coffee, e.g. Nestles or Jarrah, etc.

It does short coffees with a pretty decent crema (for a fully auto, home machine), there is also an 'extra long' coffee setting which runs a lot of water through for what I believe Italians would call a cafe americano. One quirk of the machine is that if you hit the '2 cups' button it just does one grind and runs the water for double the time, which gives you a pretty substantial mug of black coffee.