I guess there are a number of reasons why Lois wouldn't have worked in this episode. I can understand the writers not wanting to detract from the grieving process of Martha and Clark by having the surrogate daughter around, but I honestly think it will have hit Lois very hard. (Since the writers have a limited number of eps that Lois can be in, I also suspect they're holding her back for a solid run of eps to the season finale.)

Good question about the compass. I'm pretty sure it was a separate compass--just the tradition.