Would it be possible to use the body of a 3D model and just position correctly on a sims body mesh, in order to create a new mesh? Or would I have to keep certain parts of the original body mesh?

yes, its possible, i did it once with Jessica(Poser model)
But i can tell you its a huge ammount of work because you need to give each vertice of the mesh boneassignements so it will animate correctly.

Awesome! Is there a tutorial that lists all the necessary bone assignments?

Not really - it's mainly a matter of matching the bone assignments on the body you're importing to the existing body - you'll have to import an existing body already to get the skeleton in, so just leave the original body mesh in and check its assignments around the area you're assigning on your mesh and match them up as best you can - you'll probably have to do a lot of fiddling and tweaking anyway so it'll give you a good starting point. Make sure you match up the vertices on the neck too, so there's no seam between neck and head, and keep the poly count as low as possible (both for performance reasons, and, well, too detailed a body is gonna look pretty silly with the not-so-detailed faces).

There is a tool here on MTS2 that lets you copy the assignements from left to right, it will save you some work.
Cant remember were i have seen it tho....

edit,
here: http://www.modthesims.info/showthread.php?t=405899

Thank you both I'll test this out tomorrow and see what I can come up with. Also HystericalParoxysm, would it be possible to use your "How to 3D edit faces" tutorial, to import an OBJ model's face in and then conforming the sims over the said models face, in an attempt to make it look as similar to a character as possible?

Yeah, you could do that - I would stick to sculpting it as close as possible at first in Body Shop, as it's -very- tricky to get a realistic result in 3D, but as long as you're editing the original sim face mesh (you can't use your own face mesh, unfortunately), that would work fine.

alright sounds good, thank you so much!

Alright well I'm having a bit of an issue now... any help would be great! Below is a picture of my body mesh, the issue that I'm having is that the seam line that was created when I combined the mesh doesn't line up correctly in bodyshop.

I have tried to fix errors on meshes before, but I never succeeded (I don't trust Milkshape 3D, so I tried using the .obj format and Anim8tor instead.) Misfit Model 3D has bone, animation and group capabilities, but I don't know if the proper importer/exporter exists for it. Misfit Model 3D is a free program that can be used to make Quake 3 Arena models and its default file format is .mm3d. It is a shame that there is no store version of Milkshape 3D like there is with Quake 3 Arena.