I would say Probably (really depends on just how big your mash is), and Yes. And/or dunk sparge your bag in another pot/bucket/container.
Personally, I'd go bigger, but if I had the 2 gallon pot all ready, I'd take it for a spin.
You might have to figure out a way to get your strainer a little higher off the kettle, It will work fine though. As far as I see, If your pot is twice the size of your batch you'll be fine. I do 2.5gal in a 5 gallon pot. I recently pulled off a 11.5% Imp. stout. During the mash It was right up to the brim but it worked out fine. You may have to watch your boil like a hawk at first but, I think thats pretty normal.