Cool thread.
On the issue of art: y'all could just do the art yallselves, as you're doing, and just pay a freelance artist to redraw it as a singular spruced up image. The art design would still be the same, since y'all are the ones saying "hey this here, this here, looks like this, etc.," but would be "cleaned up" in the process of being redrawn and would be artwork owned by y'all.
It's cost litigation more to issue a cease and desist order than anyone could claim "damages" for by a single home few game, if there was even a case to begin with. That said, there's no case; "Camelot themed pinball game" is far too generic to face any copyright issues.