Yea it is I use a western digital 2TB external hard drive you plug it in let it sync then you can go to storage and select as your primary storage I.e future downloads will go to the external instead of internal.

Yes. I have a 2 tb external and the first time you plug it in you get a pop up saying "Xbox has detected an external drive, would you like to format it to save games?" Or something like that. It only takes a few seconds.

From my understanding, yes it's pretty much that simple. The external drives come with a USB cable that you just connect right to the port on your Xbox.