Do people use CW on 2m? Yes, mostly for EME (moon bounce) and meteor scatter, but other places. There's some AM and SSB, too.
Your FT-2900 is FM only, so it's not ideal for CW, but you could do modulated CW if you wanted. That's how the repeaters ID themselves. Some radios have built-in keyers but I don't think the FT-2900 would. For example the FT-817 can generate Morse by using the microphone's PTT button. There's no range advantage to doing modulated CW, it's still FM and so you aren't more power efficient like real CW. It's main advantage is being easier to decode with noise, but you're talking marginal increases because you're still dealing with the FM detector limitations.
Most people who are doing CW on 2m would have an all mode rig, FT-897, IC-7000 or something like that. The FT-857 for example can do AM, FM, CW, SSB on any band it can cover, 160m up to 6m, 2m and 70cm. It'll only do 50W on 2m rather than the 100W it can do on HF and 6m, though.
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