In standard Cartesian equations, $\frac{dy}{dx}$ is the velocity function because it's the derivative of position.
$$\frac{dx}{dt} = \sin^{-1}\left(\frac{t}{1 + t}\right) \space\space\space\space\space\space\space\space \frac{dy}{dt} = \ln(t^{2} + 1)$$
Given the derivatives of the parameters, why must one calculate the magnitude of a vector at a certain time $t$ to calculate speed? Can't you just divide $\frac{dy}{dt}$ by $\frac{dx}{dt}$ to get $\frac{dy}{dx}$ which is the slope and velocity at a given time. Then take the absolute value for speed.
$\frac{dy}{dx} = \frac{\frac{dy}{dt}}{\frac{dx}{dt}}$ is valid as you said.
As for the context, it's usually not a matter of why but more of what you are given and what you must do with it. Often, it may be the case that $\frac{dx}{dt}$ and $\frac{dy}{dt}$ are easier to calculate or find than directly going for $\frac{dy}{dx}$. This is especially so if you're just given the parametric equations.