Hi Stephen,
Regarding, "is the application selected to be loaded by the second stage boot loader built as a .dxe or a .ldr?"
You should generate the image (.ldr) of the application code the need to be booted through the second stage loader and can be loaded into the desire sector location of the flash.
Regarding, "can the application to be loaded be built as a binary image?"
Yes, you can generate the loader file (.ldr) either as ASCII or binary image.
Regards,
Jithul