1) no, PCs and laptops not powered up on a network cannot be hacked. When they are being used, you can swap your router back to using WPA with its attendant passphrase again.
2) Don't know how Nintendo's wireless kit works, but would imagine they are intended to talk to a router rather then daisy-chain via your Laptop.
Why not consider assigning your Nintendo kit to the DMZ (Demilitarised Zone) via a specific LAN IP on your router? No WEP can be used as its intended as a totally open channel without encrypted data traffic. It will also be separate from the WPA protected part of your PC and Laptop wireless network.