Can they sting you? Oh heck yeah! It can hurt like the dickens too. One guy I know actaully passes out from getting stung. My best way to hook a w/cat is to use a wet rag. Drop the w/cat into the rag, gently wrap it around so only the head is exposed and then run the hook under the bottom lip into the tip of the head. Too far back and you will certainly kill it.
As for hooks, I try to stay away from big hooks. A sixe #6 baitholder works. If your afraid of possibly killing the fish by gut hooking it,(it happens) try a circle hook. Just don’t set the hook. A steady retreival of the line and the hook sets itself nicely into the corner of the fishes mouth.