I think I explained how this works pretty well in this thread
(I just added some other important things I didn't know back then). Wow, that was a long time ago...
Anyways, to answer your questions. This is done very frequently and for obvious reasons. Some verbs won't work in metre in their uncontracted forms, which helps explain the prevalence of contraction in poetry. It also happens often in prose, so it is a shame that so many textbooks don't introduce it until the end or not at all. Words like appropinquauissetis are beyond unwieldy both in writing and locution, but appropinquassetis rolls off the tongue a little more easily (hell, the word itself is just long, even in the present). Laudaverunt can be contracted to laudarunt, though as I said in the other thread, contraction of the third person plural perfect indicative is rare (because long vowels are hard to contract). Spanish perfects use -arunt/-ierunt endings, so I wonder how early that standard started to be broken.
flebile nescio quid queritur lyra, flebile lingua murmurat exanimis, respondent flebile ripae