A bare .aac file is a raw stream that some players cannot seek through or tag. MP3 is accepted by every player and editor. Both are lossy, so the sound is compressed a second time.
The defaults suit most files. Under Options you can choose the bitrate and trim the start and end.
The conversion uses your browser's own video and audio codecs (WebCodecs), with hardware acceleration where the device has it; the file is read from disk as it goes and can be up to 2 GB. Where the browser lacks a codec, the page falls back to the compatibility engine. MP3 is written at 192 kbps unless you choose another bitrate.