Is there an api for maintaining the rules file?

I would like to create my own rules editor from within a Windows app. What’s the best way to integrate this functionality with my local LT?

There’s only an API if you integrate LT directly via Java (see Javadoc). If you use LT as a local server, you’ll need to restart it after making changes to grammar.xml.

This means when adding a new rule, other than using Java, is to write to grammar.xml and restart the server every time the file is modified?

Yes.