Many of the questions you've asked can be answered in the Mega-Stickes.
To answer your question, the WiiKey Fusion is a modchip which allows loading games from an SD card. Most portables use this as opposed to a bulky disk drive.
These days, you're more likely to find a WASP fusion. It is a clone of the WiiKey and serves the same purpose.
You can read more about wiring one up to a GC here:
viewtopic.php?f=36&t=6003
EDIT - Depending on how you're trimming the motherboard (if at all), I'd recommend a Megadrive which will allow you to hook it up with minimal effort.
When they are in stock, you'll find them
here. That is also the place to buy a WASP.