I started the second modual I think it is SoU and have a question. Will wandering monsters spawn in the wilderness? I hunt down the gnolls and Kobolds but is there a way to respawn any monsters?

Not if they aren't placed on triggers already. I don't think they are on timers though.

Next question, if playing through Sou and HoU would it pay to play a shifter? Where would I max out my level and how would I get enough of a wisdom bonus to get the dragons and the like. Whould it be better to be a druid all the way through?

I could never wrap my head around Druid, so I can't say for sure on the where/whens of Shifterdom. However, if you start with a relatively high wisdom, you probably will get to some pretty cool stuff before you finish Hordes.