Zimmerit, was made primarily from polyvinyl acetate, which we know it as wood glue or white glue, and barium sulfate, mostly used as a white pigment.
The actual formula is:
Polyvinyl Acetate-25%, as binder or glue; Wood Fiber-10%, as filler; Barium Sulphate-40%; Zinc Sulphide-10%; Ochre Pigment-15%, for the dark yellow color.
All of the ingredients are basically not harmful, hey, Barium sulphate is not soluble in water so theres no damage, evevn to the environment if released, hey...talk about an Eco-friendly panzer.
It could be applied on to the tank without any previous preparation, however, it was recommended a primer to prevent corrosion. So, i think its basically a "concrete" or caster that can be applied by hand. It did required a lot of time to dry (days), so they used a lamp or torch to dry it.
As for the purpose, mainly it's inferred it was to deter magnetic mines, but it's effectivenes was never tested on field.
There are some discussions on wether it was also used as way to break the tank lines and used for cammo purposes. USA tested this but never got in production.
There is even information that depending on the tank model a pattern was applied. So, if you want to be "historical accurate" you not only need to take in consideration the zimmerit itself BUT the way it was applied. USA had their own "zimmerit" basically using wooden plaques, logs.
As for it was suspended due to being flammable:
From Panzerworld:
"On 9 September 1944, it was ordered that Zimmerit application should cease immediately. This order was given due to rumors that shells could set the Zimmerit on fire, destroying the tank. While later investigation revealed that the rumors were false, Zimmerit application was never restarted, likely because the Allies had not made their own versions of the magnetic mines that Zimmerit was intended to defeat."