Sorry this isn't going to be a helpful answer, I just wanted to ask a question.
Reading the newspaper is great and all, especially if you can do it intelligently. I myself read the New York Times every once in a while. However newspapers are on their way to disappearing. More and more people are getting their news online because it is faster, easier, and does not waste paper. I think it's a great idea for a site in its idea... just not the method of printing paper simply so the child can read it and throw it away (even if they recycle it).
Oh sorry for the rant. I guess I'll try to be helpful.... It's probably possible. Sounds like a nice little challenge for me, or a couple hours work for a more experienced web designer. You seem to be new to the web game, so it would be difficult. Yes, this should be possible through a template. Previous editions could be made to be accessible. I believe there is a way to specify the content of printed pages, so you can remove the ads, though I've never used it.
As for programs... well I can't help there. I code straight in notepad, which is totally free but ads to the workload (the satisfaction of having a hand-coded website is worth it though). I use Photoshop to create content for my site, but that is cost prohibitive (definitely so). But for simple images... there are online services you can use to resize and crop photos, or freeware programs too. Stories could be as simple as text files. Graphics for the site may be difficult, but a free alternative to Photoshop that should work decently is Gimp. Never used it, but some people swear by it, and it's free.
Blah, my longest post ever. Somebody with more knowledge than me please take over and answer the questions better. Good luck, Sandy.
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