Regarding cost, doing something like this would be fractions of a penny. Obviously, the person doing the API calls is either paying for it, or they're paying for the electricity if they do it on their machine. But the cost is ultra negligible; certainly cheaper than it would be on Mechanical Turk or Fiverr. In fact so much cheaper that economically it wouldn't be feasible or worth the effort to try outsourcing it ordinarily. This is part of the game changer nature of AI.
Regarding blowing out context windows, yes, probably, but this is what loops and code are for. Think of implementing a system like a guided seminar that steps a person doing this work through it step by step, and giving them time and opportunity to iterate on and improve the product.
For example, with making up the D&D puzzles. Ask a college educated human to do this. You will find there's things you like and don't like about their results. Tell them more about what you're looking for, what you like, and what you don't like. Give them examples of what you like and don't like. Take notes on the things you discuss with them until you figure out a way to express how to coax out of a fresh person new to this topic how to give you what you want. When working with the person, work out a process where they have rough drafts, and you walk them through how to select the best items and give them pointers on how to improve on them. Write up a written process for how to do this. Maybe there are multiple phases in this process, and things go through multiple revisions to get to quality material. Now do the same thing with the LLM, and you have yourself a good system.
Same thing goes for writing stories, which elsewhere in these threads people say LLM's are terrible at. Sit a human down and tell them to give you a story, and I promise you will receive terrible results or outright copying. Instead, give your humans some guidelines. Like start with the idea that in the end our hero is going to be a particular way with particular strengths they need to conquer the central challenge. But in the beginning, they are the complete opposite of that thing. What is the central challenge, and what are the characteristics they need to conquer it? In what ways will the main character be the opposite of that at the beginning of the story? Then we put the character through hell in various ways over the course of the story to enact those changes in their character that they need to win in the end. For each of these sentences/phases above, make things that explain the ideas more fully, and make a process to iterate on these things, possibly with multiple different prompts and loops at every phase. This kind of approach more closely resembles what many real novelists do, iterating on ideas, often in the back of their mind or subconsciously, over hours or years of rumination with or without written outlines and notes. Maybe randomly select 2 things from movietropes.com and throw those in there saying incorporate these ideas. Experiment, iterate, see what works and what doesn't.
People need to give LLM's the domain knowledge and capability of rumination to succeed in so many of these domains, rather than just asking "write me a novel" and being disappointed. Or asking "write me a puzzle my D&D group will enjoy" without going through these extra steps that are implicit/intuitive for what experienced subject matter experts do.
Source: I write AI products for a living with many things in production delivering real business value at scale every day. It's not all hype, it just takes a while to implement.