Honestly, I have never quilted with feted wool, so I am not sure for either of your questions. I would speak with shop that sells sewing machines or perhaps ask on some Facebook groups.
When I'm Free Motion Quilting it doesn't matter what length the dial is set at because you override that by moving your hands to create the stitch length you want. When I'm not FMQ, I usually have my stitch length on 2.5
