You have no idea what you are talking about. You can install any kind of distribution by copying over their rootfs. For example, I am running Void Linux on WSL2.
Yes sure it can, create a usable (chrootable) Linux From Scratch rootfs tarball and import it using wsl --import, and everything should be fine. Though don't forget to remove the kernels because WSL don't load them, instead WSL uses a custom kernel shipped with the Windows system.
It's not a completely unrestricted choice.
That pool includes Ubuntu, Debian, SUSE, Fedora and a few others if I remember correctly, although it may have expanded since.
I'm not sure how straightforward rolling your own is.