.pac is mainly for single player modes
I'm pretty sure I've played single player with a Mario texture that didn't have any .pac files. It was Home Run Contest if I recall correctly. The texture turned out fine and everything.
That's because HRC uses .pcs files. It's SSE that uses .pac files mostly.
Yes, you can.
When saving as a .pac though, it is best to decompress it first.
Open the texture in brawlbox and it should be clicked on the Fit[Character] bit at the top, on the right click where it says LZ77 then select None from the drop down list and save it. The filesize should go up if done correctly because it is no longer compressed
Or use the LZ77 converter i have:
http://www.mediafire.com/?ctwyznzmnymJust extract and place it in a folder if the RAR doesn't contain a folder. Then just drop the .pcs files onto the .exe and let it run, DO NOT CLOSE THAT WINDOW! After it's done it's produced a .pcs.out, rename it into a .pac and it's done.
Note: I did NOT make that program.