Are U talking about an application or an application pool in IIS. Because Application is created using any langauge like Html,Php,.NET,Java.....etc and this application is deployed in IIS by creating a website and that web site is Isolated from other applications by using Application Pool. Hope u can get info from above statement.
And for enabling content expired, that completely ur choice if I am not wrong. This feature actually helps ur website page or content will expire from users browser cache according to the options given in IIS. when ur website(i.e Application) contain secured data then u must enable if not then no need, it depends upon U....