There are so many issues with this question I am not sure where to begin.
First i will try to answer your question about MS Project.
Project is a great tool but it was not designed for daily reporting, it is a long term planning tool.
Day to day reporting in an Agile project is accomplished with the Burndown Chart and Task Wall. At best project can be used to report weekly but that is generally not worth the effort.
If you still feel that Project is the only way to go depending on your Development environment there are tools that will create or update a project file with current status.
If this is an agile project, it has a short (2-4 week) duration. At the beginning of the iteration the Team "accepts" a number of stories and commits to complete them within the designated iteration.
If you are having new stories (or tasks not related to committed stories) coming into an iteration you have a much bigger issue that MS Project not working. If this is the case the team needs to determine to "blow" the sprint up and start over with the reprioritized backlog or get agreement from product owner and stakeholders that to accept this new work in something will have to move out, and it is very seldom an even trade.
As an example, if the PO wants to bring a 3 point story in, there will be a cost. Due to the overhead and disruption this causes during an integration it will probably cost 5 points to get the three point story in the current sprint.
I wish you luck