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Generally, pray Sunnah Rakat / Naafil (almost all) at home is the best place. Based on hadith from Zaid ibn Tsabit radhiyallahu'anhu, Rasulullah shallallaahu`alaihi wa sallam said,
"The best prayer of a person is that performed in his home, with the exception of the obligatory prayer." [Bukhari 731, Muslim 1861]
So, pray Naafil is better to do in your ...
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Short answer: on the whole there doesn't seem to be something wrong in all of this a more explicit answer would require a fatwa. However there might be an exception: I understand your case as the iqamah is done before an imam is appointed (which is incorrect practice). If an imam was appointed and he didn't allow this person performing the iqamah this iqamah ...
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I am not sure I understand your question. You would do wudu the same way you normally do it. You would find a place to stop the car, take some water and do wudu. You may carry water bottles with you in the car, or you may look for a gas-station etc. In Muslim countries you can often easily find roadside mosques which would have the relevant facilities.
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