Regarding your first question, this is EXACTLY what I do on (one of) my web stores.
You can see it in action at http://store.grandmasmarathon.com
But, setting up the variants is simple. FIrst of all, you will set up two variant groups for the item; I call one "Size" and one "Color". Because I'm original like that. ;)
Next, you'll have photos for your two colors. Set up the two color variants, put them in the "Color" group, and upload the colors for each of them.
Then, set up your size variants. S,M,L,XL,2XL, etc. Put them in the "Size" group, and don't upload any pictures.
Make sure that you set all the "Required" checkboxes to checked.
That's all there is to it!
As far as importing, it *can* be done... but you need a pretty good understanding of the tables first. However, I do believe that you can "share" variant groups (if I remember right), which may make the process of inserting the stuff easier.