1) do I need to remove the stem to fix the leak?
Yes. To replace the washer you will have to remove the stem and washer assembly.
2) how do I remove the stem from the valve body?
Look at the image I've put up. Since the nuts are recessed in the wall we use a set of deep faucet wrenches, (see image) to unscrew the valve retaining nut.
Turn the water off to the valve and remove the knob and chrome cover plate. Take your deep wrench and back the stem and washer assembly out counterclockwise. You may now replace the washer. But wait! You're still not through.
Check the brass seat for nicks or rough spots. If you find any the seat will have to replaced as well. Reassemble and test. Leak all better now? Good luck, Tom