Now that I have stable internet, I dusted off my hacking folder, updated what needed to be updated, and organized everything. So if you ever need any help with your pony hack, let me know, I'll be ready! (I can also organize notes for ideas and plans just in case.)
Someone is already ponifying Pokemon, but with ponies as Pokemon instead of trainers. But since the name Ponymon is now taken, you'll need a new name for the project. How about something along the lines of Pokemon: Ponified or Pokemon: MLP Version or something. Up to you.
Nah, I'm sure a good spriter can keep them as ponies both in battle and overworld. Look at Pichu in Super Rising Thunder, he can run on four legs in the overworld. I think it's possible for ponies to remain ponies.