Yes, you can run closed loop on the SMC 1.92. The wide band o2 sensor you got, is it the Bosch item LSM-11? The SM4 will not accept a direct 5-wire wide band sensor, I have confirmed this with Autronics on their forum. It will do a 0-5V o2 sensor with voltage scaling for the A/F readouts. Still a better way then a narrow band 0-1V method
The SM4 has a very flexiable close loop control so will work very well.
What I would do about the plugs is let the tuner replace them but tell them you want them back. Give them a clean the way do did it before (best way I beleive) and stick them straight back in. I don't beileve that they are fouled beyond repair and even if they are, surely not all and even if they all are, well at least you have them back.
Let me know how your fuel consumption goes as I am interested in the results.
Good Luck with the tuning! Post the results