Hi Tim,
Regarding
#1 - Not sure what you mean by "pitch" exactly. But if the resolution is 1um per quadrature transition (4um for a complete A or B cycle)
then yes 250mm/sec would be 250KHz which is way below the max 1MHz of KFLOP's encoder inputs.
#2 - KFLOP doesn't have any analog outputs. You might be referring to the 8-bit PWM outputs on KFLOP. Those aren't analog although it is possible to use circuitry to convert them to analog. But no you would be much better off using the Kanalog 12 -bit DACS.
HTH
Regards
TK