A trip outdoors and meeting the neighbor cat

So, I decided to take Puppy out for some air. Our apartment a side area that's very secluded, so I decided we'll start there. I carried Puppy outside in the carrier because I don't want him getting used going out in the building halls.

Two things:

1) He doesn't seem to be much of a walker. I've had cats that love to walk on leashes. He's fine with the leash, but he inspects every blade of grass and every leaf. Will he stop doing this as he gets more used to the area? I'm just wondering if I can ever "walk" him on the sidewalk, or if we should be driving to the park instead.

2) Marvin, a neighbor's cat, apparently also likes the area. Puppy does like playing with other cats. Marvin's a little skittish, but friendly to people at least. Puppy finally got nervous because Marvin was sneaking around to get closer, so Puppy went back to his carrier and I closed it up. Marvin then walked over to get pet by me. The two of them exchanged a series of meows. Not yowling, but not super friendly. Puppy was lying down and semi-relaxed during the exchange, and Marvin was rubbing up against my hand. They were puffed up when they first saw each other, but they settled down. Ears were erect, not back. Puppy had his tail up when he was out of his carrier. Marvin's tail was also up.
Would it be a good idea for me to encourage them to meet each other? Or should I avoid taking Puppy out when Marvin is out there? I wasn't sure what to make of the meowing. I wish I knew what they were saying!

The area sounds like a neutral zone with no cat owning the territory. Puppy and Marvin acted the normal way when they met. It's only when you sense aggression from either of them that you should step in. Puppy went in his carrier to avoid confrontation. Marvin was just curious but he may be a bit on the dominant side. Unfortunately, you petted Marvin in view of Puppy. In Puppy's eyes, you are his alpha and in petting Marvin you sort of acknowledge him above Puppy.
On your next outing, I suggest you just watch both cats. As I said, only step in when there are signs of aggressive behavior.

I did pet Puppy in front of Marvin, before Puppy decided to head back to the cage. Actually, Marvin didn't start coming towards us until I got down and started petting Puppy. But I see what you mean. I'll just keep an eye on them. I hope Marvin is willing to be friendly. I know Puppy would like a kitty friend, even if he only got to play with him on outings.