Yes, the sims do finish the novel, I believe it take 32 IN-GAME hours. When they finish it you dont get the money right away. You get a phone call, saying that your book sold. I got a little over $2,000. I started out with zero Creativity points, so the more creativity skills you have probably the more money you get
It took my sim 27 IN-GAME hours to finnish her first novel. I read somewhere that it would take about 50 hours, but that wasnt the case with my sim. Her creativity point was almost maxed, it was at 9, when she wrote the novel. Im not sure what it sold for, but she got a lot of asp points for it.
I have a hack over on MTS2 that adds a PROGRESS BAR to the freaking novel writing when you try to write after creativity is maxed out, so now you can see exactly how your novel is going.