I'm not sure. Given all the romhacks of SMW produced in the last couple of years and nobody getting sued (even though the authors are known/popular), I don't think they'd bother with suing for the C64 port. Just search for "romhack" on twitch.tv if you haven't seen those yet.
When it comes to SMW ROM hacks, nobody distributes ROMs. Instead, people release _patches_ which have to be applied to the base ROM (this is done through an IPS/BPS patching program). There's actually a JavaScript version available: https://media.smwcentral.net/Alcaro/bps/
Eh, it depends. They're pretty random when it comes to taking down fan works, though it's nowhere near as common an occurrence as the media would have you believe (as people have mentioned, sites like SMW Central and Mario Fan Games Galaxy have been going for years with no issues).
The general rule from what I've noticed is that a game tends to be taken down if most of these boxes are checked:
1. The game is a direct remake of a Nintendo title
2. It's of a certain professional quality that it can be confused with a Nintendo title
3. Said project has received heavy marketing/lots of press online
4. Money is involved in distributing the game
5. It's in direct competition with a Nintendo product coming out around this time
6. It's being distributed in a format that makes a takedown not legally risky for the company
The fact this is a direct clone of Super Mario Bros 1 and has received some free press probably won't help it much though.
