You don't need to go with 3.2. If you were to downgrade and then subsequently update via disc to 4.0 you could risk a brick, several have been reported doing this.
You need a backup launcher and a gamecube backup launcher. There are several million posts about these on Wiihacks and all over the internet, find one you like and see how you go.
I can't help you about the cheating thing, I prefer to enjoy my games.