1: YES, you can do this...no problem, but you must start him during his second year on your team. (his RS Freshman year)
2. The point is NOT to move up to D1A. The point is to have fun and some coaches enjoy building a "Dynasty" at various levels. I've been at my first school (at D3) for over 20 seasons now and will remain there my entire career. In another world I'm slowly moving up to D1A, which was my plan for that world. Some coaches like D2 a a lot and actually, I think it is my favorite thus far. Just do what you want...its all up to you. Its actually pretty easy to get a D2 job and could happen after 1 season if you have decent success (I don't know what the minimum is).