This may be best answered by looking for an improvement to that formula, and explaining how to find it.
The basic idea for all those approximations for $e$ is to write some large number $N$ in two different ways, using exactly the digits from $2$ to $9$, and then take $(1+\frac{1}{N})^{N}$ as an approximation for $e$. In Sabey's old (2004) example, he writes $N_{old}=3^{2^{85}}=9^{4^{6*7}}$. However, using a small digit like $3$ as the base of the exponential tower isn't optimal. For example, if we could find a way to replace the $3$ by a $5$, that would make $N$ much larger, and the resulting approximation much better...
Finding such an $N$ that works actually isn't too hard: Using $N_{new}=5^{3^{84}}$ frees up the digit $2$, which conveniently can be used to write $\frac{1}{5}$ as either $.2$ or $0.2$, depending on how you like to write your decimal numbers. At the same time, we have lost access to the digit $4$, which we have to take care of: Using properties of the exponential function, we can write $N_{new}=5^{9^{42}}=5^{9^{6*7}}$. The digit $4$ is no longer needed, so $(1+.2^{9^{6*7}})^{5^{3^{84}}}$ or $(1+0.2^{9^{6*7}})^{5^{3^{84}}}$ is a valid pan-digital solution, which is equal to $e$ up to $8368428989068425943817590916445001887164$ decimal places.
I'd be surprised if even this new solution was optimal. I replaced the digit $3$ by a $5$ in the base of the exponential tower, but using any of the digits $6$ through $9$ could lead to an even better solution. Maybe give it a try yourself!
About your second question:
The formula $e=\lim_{N\rightarrow\infty}{(1+\frac{1}{N})^{N}}$ actually approaches $e$ in a very predictable way. If you have an approximation $(1+\frac{1}{10^{n}})^{10^{n}}$, it will differ from $e$ by exactly $1.359...\times10^{-n}$, regardless of the value of $n$ (which can be any sufficiently large number). As a consequence, the number of correct decimal digits will always be equal to either $n$ or $n-1$. In general, $(1+\frac{1}{N})^{N}$ will be correct up to $\log_{10}{N}$ digits (or sometimes one less).
The number $3^{2^{85}}$ has $18457734525360901453873570$ digits, and Sabey's approximation is correct to that number of decimal places. The new solution $5^{3^{84}}$ has $8368428989068425943817590916445001887165$ digits, and my approximation turns out to be correct to $8368428989068425943817590916445001887164$ decimal places.
Unfortunately, I am not aware of an online calculator that will tell you whether a particular approximation is correct to $n$ or $n-1$ digits, respectively, but maybe you're okay with knowing the answer to within $\pm 1$? You can check the size of $N_{new}$ using WolframAlpha.
Erich Friedman actually asks on his Math Magic to get in touch if improvements to his puzzle solutions are found, which I just did. I guess he'll update his page accordingly.
I hope this helps!