Hi Rajesh,
The answer to your first question is "sort of". You can create your own lookup that will contain the approve/reject/convert options. But there will be no business logic built into that lookup like there is with ideas that would make the appropriate changes happen. That being said, you can build your own processes/work flows that will accomplish what you want when a user chooses any of these options.
The answer to your second question is "yes". You can convert a custom object to an out-of-the-box object like project using the object conversion option provided in our Clarity processes.
First of all you will need to create an object mapping that defines which attributes in your custom object are going to be copied over to the project object as well as which attributes on the project object they are to be copied into. See the following kb for help with how to do that:
http://www.ca.com/us/support/ca-support-online/product-content/knowledgebase-articles/tec1998952.aspx
Once you have created the mapping, you can use the object conversion option in a process to create the new project based on your custom object. That is also briefly described in the above KB article.
If you are not already familiar with how to create a process in CA PPM, please review the Administration Guide for your version of Clarity. There is quite a bit of information there on how to create processes. In addition, if you get stuck, our support team can help you with specific questions as you go through the process of creating your implementation.
Please mark this answer as correct if this answers/resolves your problem.
Sincerely yours,
Jeanne Gaskill