If it's on 3.1 then you can install HBC, cIOS and things on it. You can manually update the Wii to 4.1 using IOS60patched and System Menu 4.1E, then install the game IOS38, 53, 55, 56 and 57 (if needed) and it would be good to go as a USB machine.
This should be a vunerable boot1 unit so you can install boot2 hack on it.
1. Just softmod it.
2. Yes, only D3-2 prevents it.
3. If you want to, it'snot required though, unless SD slot is broken or something.