how far in advance can I work on this?
How do I store it - i anticipate a few nights on this
How do I move it?
Am I crazy for trying this?
I think once you get started, you'll find the shapes are rather forgiving - the skull will be the hardest. Personally, I would mix tylose into the fondant and you can pretty much make it as far in advance as you want. The further in advance you make it, the harder the pieces will be. The kids might think it's cool if they can pick up the bones and they'll stay intact.
I'm don't know where you live, but it's like $3 for a little jar at the cake supply store that goes a long way. I don't think it goes bad - it's a dry powder. They sell Wilton gumpaste at Walmart - that will work ok, but it's a little more expensive and not as easy to work with in my opinion.
The other thing I'd do is buy some coloring - like black, brown, maybe even a teeny bit of yellow, and dilute it with water or vodka and paint some shading and damages on the bones so they they look like they were dug up. I'm not painter, believe me and this skull turned out fine:
Well, it's going to taste like marshmallow flavored cardboard either way. If you want it to taste better, you might try modeling chocolate. Note, modeling chocolate is a two step process in the sense that you have to allow a day to let it set overnight so it will be workable the next day. But it literally only takes about 10 minutes to make.
It can dry very hard with lots of time - like as hard as chalk. But with just a few days, it will probably still be soft enough to eat. If you notice it's getting too hard, you can put it in a plastic bag.
Tylose turns regular fondant into something easier to mold and shape that when dry will get to a consistency that will hold up with minimal support. The happy birthday message on the cake I posted was done on a piece of it rolled out flat and the number four, coins, and skull and bones as well.