Regarding how to do paintings in-game, you could do something like the Sims games have done.
Give us a way to take an in-game screenshot which is added to our Knowledge. Then when we want to paint a picture we can select which screenshot to use.
How proficient we are at painting can determine how nice it turns out and as we advance in the painting skill perhaps we could add filters to the pic which alters it by using different colors, distortion, textures, etc.
This would make painting a really interactive and worthwhile experience as painters would search for creative moments they can capture and convert to canvas so they can share them with others in the game world. It would also give satisfaction to people who want to paint in the game but have no skill at it in real life.