1. Both are correct 2. what for => why do you need [something]

For what

For what are you going to Spain?

What..for

Direct question

What are you going to Spain for?

What are you studying for?

What did you buy that gadget for?

Seeking Explanations

Can you explain to me what you did that for?

I don't understand what he said that for.

Indirect Questions:

I wonder what he needs that money for.

She asked me what I wanted the book for

Polite Requests:

Do you mind telling me what this button is for?