1) Suburban sprawl refers to the development of previously "wild" land. This development includes for malls, housing developments, roads, storage facilities, retail, office space, and other such commercial or residential developments.
Suburban sprawl has several major problems, but the primary issue is the destruction of habitats for flora and fauna that previously existed there. The insidious aspect of suburban sprawl is that only one such element in the food chain need be disturbed. A housing development over a watershed poses tremendous resource deprivation to wildlife; development in general limits the area for wildlife native to that region to live, to live sustainably, and to access all areas of their environmental niche.
2) The most obvious answer to this particular question is the rehabilitation of previously-developed land. It is a hallmark of American society to only develop new commercial ventures. We can limit the problem by enacting legislation that requires infill. Infill refers to developing within existent communities, whether that be brand-new buildings, increasing the diversity of existing commercial presences, and rehabilitating older housing stock for growing populations.