Yup! You'll only miss out on a the edited move descriptions if you play Rebalanced, and maybe one or two minor text edits in other places. All of the important stuff should work fine.
You can get Aerodactyl the same way you get it in the official games, just smash rocks in Glittering Cave until you find an Old Amber, then take it to the fossil lab to be revived. Might take a while to find one but they're definitely available.
Unfortunately not, custom banners are only available if you build and install a .cia file of the game. It's a bit of a hassle to do and isn't really worth it just for a banner in my opinion.
There are one or two small text changes, but they're not important so you can safely play it in Spanish. The edited title screen won't appear in non-English languages, but all the game play changes will work fine in any language.
Yeah, I'd recommend Rebalanced or Legal, depending on whether or not you like the Pokemon changes I've made. They have very similar difficulty levels, so which one you play is just up to personal preference.