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scanff
Yes I don't think Wii would have the HP to run a dreamcast emulator. Here's the minimum requirements from one of the better PC emulators:

* Pentium 4 with at least 1.6 Ghz
* 256 MB Ram
* Windows XP or 2003 (It won't work under any other Windows)
* Latest DirectX
* Powerful Graphic Card such as Nvidia or Ati
* DC Bios (use search engines to find it)


As for the disk's. Wikipedia does mention that DVD's were technically supported but never released for the system. So the main format would be a CD.

Yes technically it would be possible to make one. But it would be totally unplayable. Unfortunatally Wii is not a very powerful system.