From what I've heard, KLGO runs the old KIXL 970 format. The KIXL owners sold to Starboard a year or two ago and are now buying KLGO. It runs a commercial religious format. However, I'd say it almost certainly gets most of its money from preachers paying for their airtime in advance.
As for whether or not 98.5 reaches 50% of Austin, the signal contour maps indicate it may reach 50% of the city, but I don't think it reaches anywhere near 50% of the entire market. I agree that you're not likely to be able to get it on the clock radio on your desk downtown, though you could probably get it on a good car radio or home stereo.