Art - appear in line with the text or as a link in the text? I would recommend in line with the text. Having to click a link pulls you out of the story, so that either you forgoe the wonderful art the artists worked hard on, or you forget what you were just reading.
Do we want more than one length allowed? (novella and novel-length?) This could be an interesting way of doing things. If there are 2 different sizes allowed, then the shorter one should have less artwork too.
Do we want to get at the root of Snape/Lupin, i.e., our own Big Bang? (If not, we should rename this challenge.) etc. The root of Snape/Lupin is definitely one way to do things. But I think there are already so many stories that deal with this exact issue, some done very well and now accepted as "fandom canon". There are also many repetitious ideas of how they got together, and by forcing one starting point, there is the risk of getting many stories that seem derivative. My personal preference (and I'm biased because I have an epic idea that I would love to work on for this) is to let author's submit their story idea and synopsis. (Although, now, that I think about it, my story does follow to a certain extent, how they get together.) If the synopsis seems to similar to other submissions, maybe there can be a period of brainstorming to help tease out what will be make the submission unique and subsequently even better. This could be similar to querying, except without the rejection!
How is a Big Bang run? Sign-ups yes. see suggestion for submitting synopsis above. re timing: 1 month for brainstorming/outlining - authors could work with 1-3 (advanced) betas 6 months for writing - submit early draft to artists 1-2 more month for editing and artists for illustrating
5. How are artists recruited and assigned to a fic? Post in the comm inviting, but also invite artists who may not have seen the announcement.
If each fic will have a certain amount of images, and a certan amount of artists are participating, then assigning artists seems like it would be easiest to coordinate.
re handling stuff - I like how the various olympic-type comms have a closed community for all of the organization. Maybe, each BB submission has the following: A lead volunteer (fake Lore) who acts as a project manager - they ensure all milestones and deadlines are met, help the writer through issues, coordinate with the betas and artists, etc. 2-3 Beta's who can help throughout the process, including final editing. Artists who each take on illustrating 1-2 pics. Writer.
re reveals of art - if the artists are working together in the same comm as the writer, then it'll be harder for the art to be hidden until the final reveal. I like the idea behind it, but depending on how you structure it, things may be more or less challenging.
Motivational prizes - sure! Maybe ask for volunteers from the comm who aren't involved in this. E.g. one person commits to writing x drabbles (one for each writer), another commits to making an icon for each member of the team, etc.
re volunteers - see above idea for team project manager
I'm really excited about this!!! Even if I don't end up writing anything, I'd still love to be involved in some way :D