YOu can definiately set the mod wheel to control just the cutoff (without it going into wah wah ) you have to set up the 3rd LFO just right using the right type (forget which parameter it is now) so that it has no vcf pulsing just a smooth adjustment. Have done this on a number of patches. Make sure you adjust LFO 3 (for VCF) not LFO 1/2 (press the LFO button until '3' shows on the display) then cycle through the wave types for the LFO and I think one of those, set with minimum 'sweep' will give you a vanilla VCF adjustment that you can then use on the mod wheel with the VCF on it.
As for adjusting with the dial, no it won't do smooth sweeps that way - it's something to do with it's digital parameter access (similar to some digital synths) and needs a retrigger of key to use the new value, yeah strange as the resonance can be swept with the dial - However a non issue as it handily maps to the mod wheel as described and is VERY smooth there, no stepping at all (BTW I think Akai did it on purpose to stop people trying to sweep with the dial as it's staggered, it jumps in values of 3 or more as it's a 'quick adjustment' unlike the up/down buttons) had they let you sweep it it would have had stepping like no one's business and people would have thought it wasn't capable of smooth sweeps - the key is in the mod wheel > VCF.
to clarify, unlike the alpha dial on a juno 2 for example, the quick adjust dial really is that so even if adjusted COFF in realtime without rekeying it would jump values and sound crap, akai had a choice, allow the dial to sweep and suffer BAD stepping OR make the dail increment smoothly +1 at a time and make a very 'touchy' dial (not even sure it would be feasible as the turn from 0 / 99 wouldn't allow +1 - unlike the alpha dial which is a continuous controller the Akai one has upper/lower limits hence can't be used for +1/-1 hence would = bad sweeps, so they took away that ability (IMO) to stop the synth being 'mishandled' and thought of as bad, and put it on the Mod wheel instead - smooth!
edit > set parameter 24 to 3 (select VCF LFO) then set parameter 23 to 1 then make sure parameter 21 is at 0 and you can then use the mod wheel (in VCF mode) for a sweep (though it won't be the full 0-99 it will be from the patches current COFF to a certain range above it).