Check out Michael's or AC Moore for the dowels. I've seen some in Michael's, but I haven't seen any in AC Moore. But they sell basically the same thing ... sometimes different options.
Sorry - I don't know about the finishing of the wooden needles. But my guess would be to use some type of wood varnishing? :thinking: You can also buff them with fine grade sandpaper - that might get them smoother. But also keep in mind that that is a characteristic of wooden needles - they naturally tend to grip the yarn more than plastic, aluminum or nickles etc... :thinking: