if I recall correctly, the features you describe are not trivial. The easiest might be color. It's been quite a bit since I researched text though.
Cyclone wrote:1. Speed of text blocks before they switch to the next one.
There are two separate speed values. One if you press a button and one if you don't.
Cyclone wrote:2. The position of the text on screen
if I recall correctly that is hard-coded. Still possible to edit though.
Cyclone wrote:3. Colour of text?
if I recall correctly, text uses palette 0 in this.
Cyclone wrote:4. How do you add additional text blocks and/ Additional lines of text beyond the default 3 lines.
That is a bit tricky. You can add more lines, but the game doesn't like more than 4. You can edit this by editing the text blocks I think in bank $FC. There is a terminating character, 0, that tells the game to stop reading more lines. Also, dkc1 uses sprites for text. That means there's a low cap for the amount of text characters on screen at once. 2/3 avoid this by using bg(2?).
CONCLUSION
All your features are very possible, but not trivial and makes things easy to break.