Thanks!
1. We mostly have to buy the music since none of us both can make it :D
2. I use Spine for animation.
3. Basically, any engine you're comfortable with will do in my opinion.
I'm assuming you're making your own game, is that right?
There's a youtube series that's very helpful in this regard, especially the earlier episodes like this one:
Cheers and stay funky,
Dez