Are these methods correct? Which one is better?
First Method: $$\left|\frac{1-a}{1+a}\right|<1\Rightarrow |1-a|<|1+a|\Rightarrow(1-a)^2<(1+a)^2\Rightarrow -2a< 2a\Rightarrow 4a>0\Rightarrow \boldsymbol{a>0}$$
Second Method
$$\left|\frac{1-a}{1+a}\right|<1$$ $$-1<\frac{1-a}{1+a}<1\Rightarrow$$ $$0<\frac{2}{1+a}\,\hspace{0.25cm} \text{and}\hspace{0.25cm} \frac{2a}{1+a}>0 $$ $$a>-1\,\hspace{0.25cm} \text{and}\hspace{0.25cm} (a<-1 \hspace{0.25 cm} \text{or} \hspace{0.25cm}a>0) $$ $$\boldsymbol{a>0}$$
Since none of oldest two answers addresses OP's two prompts at the beginning of the post, I post another answer for fun.
Yes, definitely because each implication is irrefutable. However, they are incomplete because one has to find all $a$ satisfying the inequality. OP has shown that
$$\left|\frac{1-a}{1+a}\right|<1 \implies a > 0,$$
but does each $a>0$ satisfy this inequality? --- This is the missing part of OP's attempt.
To complete the solution, we prove the converse of the above implication.
The first one is more concise, and I personally prefer this one in this case. However, the second one is more flexible and informative: first, it gives more information about the positivity of the fraction $\dfrac{1-a}{1+a}$ itself by decomposing it into several cases. Second, the first method (squaring and compare the two quadratic polynomials in $a$) works well if
Otherwise, I think the first method would not save you work.