1. What distro (exactly) do y'all use - it says Ubuntu LTS in the docs - so Ubuntu 22.04.1 LTS is the current version - is that it? I have the luxury of picking whatever I like (thankfully, I'm a debian user, so Ubuntu/Mint/Debian are fine with me)

I personally use Mint but Ubuntu LTS should work fine. I haven’t found the Genode build system to be very picky about the host, at least with Debian variants.

2. If I want to change out the wifi firmware and edit the config files, do I need to just tweak the files and build the bootable image or do I need to do the build Sculpt from source thing?

Unfortunately I think you need to build from source. The firmware whitelist is hardcoded and I don’t see a way around that, unless someone has a better idea.