Have not looked at this but in general SNES assembly is probably no better than just pressing disassemble on a commercial ROM. Likewise I am not sure if any assemblers place nicely with such code. Later systems might well have nice high level language source code but the 16 bit era, especially for high performance games like this, are all about assembly. For the most part the SNES stuff is mostly of interest to those looking for cut content and at historical programming approaches, those looking to make hacks might find a few nice comments, descriptions of compression or variable names but not much else.
1) I guess. Would face the same issues with memory (graphics and conventional) as anything else, though you might be able to subvert and expand AI racers.
2) Could have done that anyway. Indeed even with the source code and no worries about using it I would probably have looked at the ROM approach. Find the sprites in both (can probably dump them from the GBA memory/OAM/OBJ/... viewers for that part rather than learn GBA hacking), sort any size issues (GBA is a bit lower res than the SNES so... see all the fun and games with donkey kong, mario and the early ports of things), grab a palette and find out if you can happily overwrite it (which is to say some colour in it is not pulling double duty) and do as you will.