Another solution to the first part of your question would be to select a portion of spiderman's skin, copy and paste as a new image.
Use the point-to-point selection tool and select the area of the child's photo that you want to have "spiderskin" applied to, click on your color pallet, select patterns and your spiderskin new image should be one of the first ones in your box. Select it and then flood fill your selection with the pattern.
Morphing faces can be done easily with layers. Copy your Shrek face to a new layer on your child's photograph and use your deform tool to position it over the child's face, size it to the childs face and angle it to the child's face angle. Then go to your opacity and lower it until the child's facial features show through.
This sounds like a fun project!
Hugs,
Margaret