Sprites are normal entities and don't have a limited/ finite life (when placed with WED or just via ent_create). Might wanna have a look at the following feature as well:
A8 If the sprite's file name ends with "_x2" or "_x3", it is rendered in the shape of 2 resp. 3 crossed planes. This is very useful for simulating vegetation. You can find an example in the infinite_terrain.c demo.
I'd probably spawn randomly scaled and oriented grass models all over the place, adjust them a little (in-engine) manually. Then have a script combine them into just one mesh or multiple meshes, depending on the vertex count or the size of the area. Another function would then write all vertices and triangles into a text (obj) file, following the very simple *.obj format, and import it into MED again.
You don't need any while loops for interaction really, just put additional code into the vertex shader which does some distortion based on character positions.
