1. No, it's perfect as it is. The past continuous wouldn't work.
2. There would be no difference in meanig, but it's fine as it is.
3. It's fine as it is. If you change "I wanted to be writing" to "I wanted to write", you would also have to change "not grading papers..." to "not grade papers".
What does your title "tale of pig" have to do with your question?
Student or Learner