The "easiest/most efficient" way around both of these issues is to use the hardware you already have. Many DVD players have an feature where, instead of selecting a chapter, you key in a time and playback jumps to that point. Needless to say this is very useful when there are no chapter stops.

Also, nearly all widescreen TVs have a feature to "zoom" a non-anamorphic image to fit the screen in correct proportions. Look for a mode called "zoom" or "cinema".

If want a new DVD with added chapter stops, this can be accomplished fairly easily. Use PGCDemux to extract the separate video, audio and subtitle streams from the original DVD. Use DVDAuthorGUI to re-author these streams to a new DVD - the program has an option to auto generate chapter stops at defined intervals (e.g. every 5 minutes).

Converting 4:3 letterboxed widescreen to 16:9 anamorphic is not so simple, as the video needs to be re-encoded. You could try using DVD Rebuilder (you will also need an MPEG-2 encoder, e.g. HC Encoder) which has a 4:3 to 16:9 option.