Question 1: Graffiti Kingdom. Technically. Also the game Tensai Bit-Kun: Glamon Battle, which came out after Magic Pengel and before Graffiti Kingdom, uses the exact same drawing and fighting engine as magic Pengel, and even has a feature that let’s you import your (Japanese) Magic Pengel doodles. Only downside is that it only came out in Japan, so you’d need ether a Japanese PS2 or a modded one to play it. And then there’s Lost Magic on the DS that takes place in the same universe, but isn’t a drawing monster game.
Question 2: Zoe and her brother continued traveling looking for their father (Or, at least Taro seems to think they are) in the game Lost Magic, and in he meantime managing to get separated from each other halfway across the freaking world in the possess (Partially the protagonist’s fault) until finally meting back together again and continuing the search
And statement 3: Graffiti Kingdom and Tensai Bit-Kun. eat yer heart out.