What are the key differences between making a costume mod compatible with the Loader and one that's strictly vanilla?
Vanilla imports have access to a limited set of "slots". They can draw clothing sprites on the thighs and calves, for example, but not on the forearms. Modders can partially compensate for these limitations; you can draw "tattoo" sprites on the forearms but they won't be fully functional as clothing (they won't obey RGB sliders and they'll obey skin HSL sliders).
Loader imports can use slots which were absent from the original modding specification; modders can create stockings, long sleeves, handjob-capable gloves, etc. This type of mod is
partially usable in the vanilla game - vanilla users will see the basic parts of the costume but not the advanced stuff. For example: the sleeves of a
plugsuit won't be visible for vanilla users.
Loader mods can go much further than that; modders are able to forcibly draw sprites anywhere they want. This approach is used to put clothing on the male body, which is not setup to accept conventional mods
at all. This approach is also used to replace the guy's penis. This type of Loader mod doesn't adhere to the modding framework and therefore it tends to have poor compatibility. The game doesn't really understand how to remove such mods, so if the modder hasn't written a custom removal function then the user might be forced to restart their game in order to get rid of the thing.
Would it be possible to make the ears and head as a .png hairstyle?
It depends on your requirements.
You can't remove the nose with a PNG file, so if you want a flat-faced effect then you'd be forced to draw a longer jaw and much thicker lips. Neither of those things can be included in a PNG hairstyle because a PNG hairstyle is
static. If you want a flat face whose mouth is able to move then you'll need a Flash mod.
If you're willing to accept a standard nose+mouth+jaw then you could use a PNG hairstyle to redraw the brow ridge and forehead. Remember that it's a pain-in-the-ass to match colors between static hair and skin. In the Daemonette example, you have purple skin drawn on the hairstyle PNG file - which means that you must apply a precise HSL adjustment to the girl's skin in order for it to match the purple "hair" without creating an obvious border or seam.
As far as helping to jump-start the process a bit, I'd be more than willing to trace/make base designs using the template. What program would I use for the drawing process?
Inkscape is recommended because it creates vector files. Flash uses vector graphics; a Flash modder can import your vector artwork and then tweak it as needed to fit the template. The sprites can also tweened or animated, if the project calls for it. In the context of SDT, that applies mostly to breast-slider costumes and dynamic hairstyles. Occasionally a tail or set of wings will be given a looping animation.
You can also use raster graphics tools (such as
Paint.NET or
GIMP) but Flash modders can't fine-tune them. If you're already familiar with one of these tools (such as Photoshop) then the overall results might be better/faster than learning something new. Raster files are much more difficult to animate and most Flash modders won't bother to try.