What do I use a pain au chocolat for

Lollipops can be used to make more lollipops, and when you have enough you can turn them into candy either by throwing them into the wishing well, or by investing in the mill.

They do stack, yes. I stacked a couple of spell and potion countdown reductions so I'm now sitting at 60%.

Once you cannot stack them anymore, the option for that particular power-up will disappear from the menu.