You're able to mod a mod as long as it says it's okay at the top.
Just make sure to add a lot of your own to said mod if you do so. A modded mod with nothing but a few changed values probably wouldn't be released by the judges.
As for manipulating the contents of a WAD or PK3, your best bet is to open them up in SLADE.
You can use the SRB2 wiki as a reference for how modding works.
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