For 1) I had to use the Arena. I was having trouble getting some old raws for My Little Ponies to work on Steam.
Being an absolute novice, I asked around some else who had made some custom crustaceans on the Steam workshop and they said they used the latest old version of Dwarf Fortress and they used: The Arena to check if the entity loaded in correctly with skeleton. An immediate crash will occur if the skeleton is missing. I had an early failure on steam with my ponies acting weird, since world gen and fortress are separate, the world generated, but the ponies couldn't move or perform tasks in fortress mode. A tale tell sign was all of them had 'vision lost' and the fisherpony cancelled their fishing lots of times. Upon using the old free version of Dwarf Fortress, I loaded up the arena and tried spawning in the entities' and it crashed.
There is a utility program bundled with the lazy newb pack, called Dwarf Portrait. This utility will load up raws for creatures of saved games, etc.
When I looked at a vanilla creature, the skeleton/body plan will load up. However for these 'vision lost' entities, no skeleton loaded up. So they were entities without a body plan.
I then created detailed body plan files for these creatures and that seemed to work. fine.
2) I have asked about body parts as digging tools, but I don't know if its possible, I think the digging implement token requires an actual tool object unfortunately.
3) Not sure, I currently assume that entities need to be of the same entity, but can have different castes which interbreed. Not sure if Elves can breed with Dwarves, etc.
It might not matter for world generation, since entities apparently don't need physical bodies to colonize the world since they are different game modes.
But you might be stuck with no new children once in fortress mode.
4) For Graphics, I have used single creature graphics for Adult/Child/Animated Dead Adult/Dead Child. Renaming files and txt references are important for making sure that your custom intelligent Deer species isn't just using the Deer from the vanilla creatures, for example.
These placeholders don't show armour, weapons, etc. Just the one image representing all Ponies, etc.