Teachers may create feedback for individual questions and or on the overall activity. That feedback may be viewed by the student on their student activity stream page through their homepage, or, by viewing opening the activity in the activity player, or, through their student grades page where they would select the individual activities to view.
Does this address your question?
Are students alerted when they have feedback?
It depends. If you type feedback in the grade screen for an overall activity the student will see a speech bubble in their gradebook. They can click on the item to see the feedback.
Note I left that feedback for myself, not a student. ;)
As Brian mentioned, you can also assign feedback to a specific question. When you are writing your question there is a frame to create feedback.
You choose a rule for when the feedback is shown. You can select from always, when correct, or when incorrect. There is also a custom option. For example, we have videos explaining how to do select questions on an assignment. If a student submits an incorrect answer, the video comes up for them to watch.
You could use the custom option for common errors. So say the correct answer is supposed to be 3 feet, you could set a custom condition that says if the student answers 3 a message pops up saying "[y]ou forgot the units. Please try again."