anyone have any pointers as to how to go about making this papa smurf cake?

http://www.designer-cakes.com/smurf.php

I am a little stuck as to how I should do the nose and ears?

To cover in fondant, do I just cut my pieces into the shape of the area to be covered and fill in the seems with piping?

You might try sculpting the 3D pieces out of cake "clay" (cake balls mush) then dip them in candy melt and attach to the cake. After that you can cover the whole thing in fondant.