I think you're going about it in a strange way. Just get DXADecode, it's included in the PCP download, and then drop the .Wolf files onto the DXADecode exe file and it should unpack them into a folder. There you have all the unpacked PNG's. Most image files are in picture, but some aren't so unpack and check through all of them. Rename the .Wolf's so they aren't called anymore then move the unpacked folders into the data folder so they are called instead. The game can call from folders so re-encoding them into new .wolf files is a waste of time.
I'm not sure what you are trying to do with step 2 there. But IIRC you don't need to use the editor to edit art assets. Just use image manipulation software on the files.