yes, it means practical. "practical" is the more general way to say it, "pragmatic" means the exact same, but usually implies a higher level of strategy. A pragmatic person is practical, but maybe a practical person is not necessarily pragmatic? I'm not sure...
if we look at the root words, "pragmatic" comes from Latin "pragmaticus", which apparently means "skilled in law or business. "
"practical" comes from a Greek word, meaning something like "to do".
so you can see that 'pragmatic' has a connotation of more skill, whereas practical is just to take some convenient action.
this corresponds to my understanding as a native English speaker.
pragmatic is a little bit less common than practical, but I wouldn't say it is exclusively "formal".
hope that helps