Well Axe works in integers, so the decimal is not calculated and you are left with 1.  The concept is basically this:  You store the coordinates to a screen that is 256 times bigger than the calculator one, and when you display your character you zoom out by dividing by 256.  This means you have 65536x the positions of a normal screen, so you have much more precision.  Everything you do to the value now will have 1/256 as much effect.  Instead of adding 1, it will now be like adding 1/256

Yes, this would allow you to create parabolas, as well as more natural, precise movement. The difficult thing about doing this, however, is simply remembering when to translate your coordinate system. For a simple 2D game, it's not that bad, but with a 3D (raycast, Mode 7) game, you would also be scaling when referencing your environment's tilemap.