1) There are programs which will compile your sprites into lumps, but you have to provide both them and the S_SKIN lump. Try XWE or DeepSea.
2) Check when SRB2 was first released. Knuckles hasn't been finished yet. Okay, so AJ has much more to do than draw sprites. A character wad may rob you of some weeks/months, or maybe just some hours, depending if you're going to draw the sprites from scratch, edit previoulsy drawn ones, or use existing ones and whether you're going to make all of the sprites, or just copy some around (ie: Shadow WAD's running sequence).