Part of if you need to jump to legal size paper depends on your printer. If you can do "full bleed" printing that starts right at the paper edge instead of leaving a margin then you can squeeze most covers on standard paper.
Yep. I can do 0 margins with my printer, and I think it looks good. For me, it looks far better than the alternative. In fact, I just picked up Season 4 at a farmer's market for $10 because there was no outer case, just a badly damaged inner case. All the DVDs were in great shape. Took it home, put the discs in one of my new cases, added the cover, and now we're up to Season 4.