Yes. Make sure that you are cycling fast enough to raise your heart rate so that you are slightly out of breath. (cardio is anything that gets your heart rate up)
Yes, cycling will burn fat and tone up your legs. Make sure you push yourself and get your heart rate up.
If you really want a good workout while cycling try a Spinning or RPM class at you gym. This is a group exercise class on a stationary bike. You will burn hundreds of calories and it...