Yes, you can select your stateroom.
Overall benefits of booking on board vary. In most cases, this encourages you to book sooner, rather than later. Since DCL rates rise as time go by (and rarely go on sale), anything that gets you to book early is a good thing. But be careful if you delay your plans to book, just so you can take advantage of the on-board deal. If the base cruise rate rises too much while you wait, the on-board deal may actually cost you some money.