You can edit answers even if they're not community wiki. It just reduces the reputation requirements to be able to edit without approval if a post is CW. The main use of CW is to directly invite others to edit the post.

And yes, moderators can convert to community wiki, but I don't think that it necessary just because an answer is outdated.

[From a more general question on Meta.SO I answered a while ago:][1]

> From the [blog post on Community Wiki from Grace Note][2]:
> 
> > The intent of community wiki in answers is to help share the burden of
> > solving a question. An incomplete “seed” answer is a stepping stone to
> > a complete solution with help from others; an incomplete question is a
> > hindrance and an obstacle to getting a solution as no one understands
> > the inquiry. It is in answers that the goal of community wiki, for the
> > community, by the community, shows its truest colors.
> 
> If you know that your answer is incomplete and you want to encourage
> other users to add information to it, you can make it CW to invite
> others to edit the answer. Since everyone can propose edits, community
> wiki is not necessary anymore for collaborative answers, so it has
> lost a lot of its usefulness. It is now more of an invitation for
> other users to edit, but it is not really a technical necessity
> anymore.
> 
> It is rather used as a sign for others that you don't mind, and even
> encourage other users to edit the post. Many users hesitate to make
> big changes to posts belonging to other users, CW means you relinquish
> the sole ownership of the answer and encourage other users to add to
> the answer.

 


  [1]: https://meta.stackexchange.com/a/108137/151385
  [2]:
 http://blog.stackoverflow.com/2011/08/the-future-of-community-wiki/