firstly 2/3 = 1/1.5. I think you got that already. I changed it to 2/3 kilometres per hour, because that is how we usually represent speed, in km/hr or miles/hr. We don't usually say our speed as 1km/1.5 hours. Also, to solve the problem you need the speeds to be in a common ratio, either km per hour or hours per km. Either way the ratios need to be the same. If you keep the speed as 1km/1.5 hours, then you need to change Tim's speed to km/1.5 hours which would then be 0.75km/1.5 hours. You could solve it this way also. There is nothing wrong with that, I just think writing the speed in km/hr makes more sense. Good question though. Maybe you are more used to seeing speed as miles per hour?
It’s the time for them to travel 1km in total. As in Tim might travel 600m and John 400m, so in total they have traveled 1km. You could think of it as if they start 1km apart and walk towards each other, how long would it take for them to meet up.