Let's see if I can help you with some of your questions:

Could I record onto CD's instead? Tapes give me 2 hours each; CDs only
give just over an hour.

CDs will never give you more than 80 minutes of recording time because
their data-stream playback rate is fixed. You could cram twice the length of
recording into a CD, but it would play exactly twice as fast, making
everything sound like a chipmunk because the player will only playback at
one data rate. MP3 players can vary their player playback rate which is why
they are so handy, cramming TONS of crap into the same space using fewer
bits...CD players can't, sorry. :/

Problems a
(1) Sound Feeder solution is messy with the walkman and the sound
feeder wired together and powered from the 12V socket and usually ends
up on the passenger seat.

You could try cramming the sound feeder inside your console (if you have
one) by prying out the snap-fits on the console panels and laying the unit
somewhere where it won't interfere with the transmission shifter, etc. Then
just have the power wires protruding out somewhere less visible with the
power connector on the end (near the cigarette lighter probably).

(2) Most of the the FM channels are used so it is difficult to tune
in.

I got nothin'.

(3) The frequency control on the Sound Feeder to tune in to the radio
seems to drift and needs occasional adjutment.

You could try reading with a multimeter the exact resistance of the
potentiometer (frequency control) inside the sound feeder with the cover
removed (first you'll want to get the best possible frequency by listening
while tuning the dial) , then solder in a resistor pair that matches that
resistance as closely as possible in lieu of the potentiometer (remove the
dial and put in these resistors instead).

Or, you know, just put a dab of hot-melt glue onto the dial when it's
adjusted right. =)

Ideally I would like to install a separate car radio cassette (or
cassette only if available) feeding into the pre-amp via an auxiliary
input of the factory installed system. Otherwise an input from a
walkman cassette, again into an auxiliary input on the installed
system?

Find which wires in that changer cable are the audio L and R, then cut
them. Then: 1. solder the end of the audio L nearest the changer to a
double-pole, double-throw (DPDT) switch contact, the one NOT in the middle,
and on the left side of the switch. 2. solder the L audio signal from the
walkman (get to this signal wire by cutting a headphone wire pair + jack
from a pair of cheap headphones and stripping the loose ends) to the OTHER
contact on the switch on the same side , NOT in the middle. 3. solder the L
audio wire from the changer cable nearest the head unit to the CENTER
contact on the switch on the same side you've been soldering to. (this way
you'll be able to switch between the cd changer and walkman at will) 4.
repeat this for the right side of the switch contacts, keeping the
orientation of the switch contacts consistent for each audio signal you tap
into.

Lemme know if this helped!

Anders