if you live in the US, you should probably be careful about admitting on the internet that you're distilling anything. the ATF wants their forms filled out and their fees paid. and they're not afraid to put an exclamation point on how they feel about things.
that being said, i doubt that sanitization would be a problem with a distilled spirit, because there isn't much that can live in "barrel strength" alcohol. as i understand things, the char is largely a flavor component, so you may be missing out on some flavor complexity that you might otherwise get (chocolate, coconut, etc).
as far as time, that's up to personal preference. if it works like beer, more time on less oak is going to bring out "better" (more complex) flavor characteristics (obviously, up to a point), while less time on more oak will give you more one-dimensional oak flavor (lots of vanilla, and a little "woodsiness"). some scotch whisky spends 30 years in contact with oak. it really comes down to how long you can stand to go without drinking it, i imagine.