I need to get some children's book illustrated. Shall be thankful if
you could answer some specific questions at the end.

There will be 20 stories and five illustrations per story. Thus there
will be a total of 100 illustrations.

I have not made up my mind about the following three options:
- Pencil drawings
- Water color
- Photographs

The illustrations will depict children (6-10 years) performing routine
childhood activities such as play, eat, fight, study etc. The book
size would be about 17x11cm. (1 inch=2.54 cm).

Pic1: Nancy (about 8, cultural non-specific) is sitting with apple
beside her on the table. Jeff (about 8, cultural non-specific) is
standing looking at the apple greedily.

Pic2: Jeff has taken the apple. Nancy is trying to snatch it back.

Pic3: Nancy is trying to cut the apple with a big knife. Jeff is
looking expectantly. A small knife lies close by.

Pic4: Jeff has cut the apple with a small knife and is offering a
slice to Nancy. A big knife lies close by.

Pic5: Jeff is offering the apple to Nancy and Nancy is pulling her
head away.

Questions:
1. What are the approximate relative costs of the three options?
2. Do illustrators at the first stage necessarily work through
photographs of real people? That is, they first take photographs of
people in desired setting and action and then render these reference
photographs into sketches or paintings with necessary changes?
3. Can the illustrations (whether sketches or water color) be done
solely/ largely by software? What are the advantages and disadvantages
for the digital art?
4. Are there artists who offer this service on the Net?

Thanks