use the word illustration if you want to sound more professional. If you want cartoon you will need to draw them. Same for illustrations. If you want to live trace it, you can, use the live trace feature. and see for yourself what happens. (https://www.youtube.com/watch?v=wp_R1LwF-IU)
Right, there should be no watermark, are you going to remove it or get an image without a watermark?
Do you expect the program to remove the watermark? if its there is for a reason, and you may be trying to use the image without concent.
How can you loose quality on an image if you are changing it to a vector format. Do you know the difference between pixels and vector art?
In short. there is no cartoon button/filter/script that you can click/select to make a cartoon/illustration from an image. Live trace is as close as you can get without much effort. the other option is getting that pen tool out and draw over the image, and with 500 images, you will be clicking with the pen tool for a very very very long time.
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