You're fine. And the answers in order are:
1) Nothing. There is no obligation to submit to the game jam. I'm always going to encourage folx to join and then to submit something but there's no penalty if you don't.
2) This is not a ranked jam so you are always allowed to use material from before the jam started.
3) No idea is too simple or too complicated, though overly complicated may be hard to complete before the end of the jam. Of course projects are acceptable in any state.
So no pressure! If you're new to coding for DOS feel free to ask. And above all have fun!