Sorry, I know I'm a little crazy with all my questions

but I really just want to get this right.
I am wondering when it is ok to introduce contractions in reading. For example...
It's a snowy day.Instead of...
It is a snowy day.I'm also wondering about showing possession.
Is it ok to use the apostrophe? For example...
Jacob's eyes are blue.Or would it be better to say...
Jacob has blue eyes.Or, does it not matter. Should I just mix it all in and assume he will eventually understand the meaning. I have all these homemade book ideas swimming in my head but most of them present me with a few extra questions.
Thanks a million for everyone's help!