Your approach does stop notifications from being sent but they will still be generated and will be sent if sendmail is ever re-enabled. You could delete the notification records manually to avoid that though we have never done that. We limit notifications in our non-production instances by removing the email addresses from most of the user entries.
You can change all email address to an invalid address. We disable notifications during deployments (in case a workflow change might trigger a notification) by adding "_donotuse" to the end and then remove this when done. the notifications still get sent, but nobody ever receives them. You can do this with a script like this:
UPDATE KNTA_USERS SET EMAIL_ADDRESS = EMAIL_ADDRESS || '_donotuse';
and then to reset it:
UPDATE KNTA_USERS SET EMAIL_ADDRESS = SUBSTR(EMAIL_ADDRESS,1,LENGTH(EMAIL_ADDRESS)-9) WHERE SUBSTR(EMAIL_ADDRESS,LENGTH(EMAIL_ADDRESS)-8,9) = '_donotuse';
For your second question, to disable the ability to create a timesheet, I am not sure I understand what you are asking. If nobody should be allowed to create a time sheet you can remove the Time Mgmt license from all users. If for some reason you want to leave the license active, then you could remove the timesheet Time Periods from the database, however this might cause problems if you have existing timesheets, so just remove the future time periods. These are stored in the KTMG_PERIODS table.
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I believe you can stop notifications by disabling the Notification Service though I have never tried this. Of course, if it ever got enabled at some point in the future, you could see a lot of notifications flowing out of the system.