Ive said this once and will say it a million times
flash 8 > CS3/CS4
Its simple, it works. No bullshit, no "custom tweens" and all that. back in my day we didnt need flash to ruin the cartoon for us!
anyway I use a wacom intuos 3 tablet. its not that expensive and you can make magic with it, makes drawing and animating twice as fast and fun.
as for the blurs (wich I ended up removing to reduce lag and filezise, appart from the fact it looked better without them) you can do them in flash, you dont need to use photoshop if you dont want to.
Only movie clips can have filters (like the blur!) in them. just click on whatever movie clip you want to blur and check out the properties bar for "fitlers" you should find a healthy arsenal of stuff there.
hope it helps!