A full discussion on e-stops could be quite a long discussion, the primary objective is to make the system safe. Most often this involves a latching contactor on the mains supply with a chain of interlocked e-stop's and maybe other sensors as well. When tripped it kills ALL the power to the machine, as to whether that's the safest strategy depends a bit on the specifics of the machine, sometimes it's safer to stop the machine in a controlled fashion before killing the power.. Keith_W who sometimes posts here could probably explain the choices better than I can.
Just stopping the vfd is fine for tool changes.
Normally you don't have a contactor between the vfd and the motor. ( I'm a bit unclear from your description as to how it's wired ).
A circuit diagram of what you currently have would be good.
Regards
Ray
EDIT Here's one I prepared earlier... shows a latching relay that locks out the vfd control. ( I realise that your machine will probably be different to this one, and I forget what this one was for, I might have been one of RC's projects from memory)
http://www.backsaw.net/pics/Misc/RCDrive.jpg