You have several questions here. Each has an answer and yes, Daphne runs fine on Mala.
A batch file is a short command file used to launch Daphne with Mala since Daphne does not have a command line interface.
See my post here (3rd one down) for more info on Daphne Batch files:
http://forum.arcadecontrols.com/index.php?topic=121260.0I can send you the EXACT code later.
Use Daphne launcher first to get Dragon's Lair, etc working WITHOUT a batch file and WITHOUT Mala. Then build a batch file that will launch WITHOUT Daphne launcher, then integrate the launch of the batch file into Mala. I can send you screenshots later or keep searching these forums.
Getting Frame files to work comes WAY before a batch file. Frame files tell Daphne how to load mpeg/video. Configure Daphne loader to load the frame file, the frame file loads the mpeg or video file(s). This part is basic to running the emulator. Get this working FIRST before you start worrying about batch files and Mala. You may need to google "how to set up Daphne" first, then come back here for help with Mala.
You may want to consider these links:
You will need 3 things beyond the Daphne emulator to run the games; roms, framefiles, and mpeg (or other video). The toughest of the three are the mpegs (video). Unlike MAME, Daphne roms are easy to find and use. You can write your own framefiles if needed. Video is the true copyrighted data.
That's the order of operations, I'm at work right now and not in front of my cabinet system, so I can't help you any more right now, but I can show you more details if needed. I'm here to help, but you have several levels of coding to work out.