How did Wallace... *Obvious spoiler warning*

...recreate Rachael without her DNA? I may have missed something, but as I understand it, the story largely revolves around Wallace's quest for the DNA of a replicant who can reproduce, i.e., Rachael. So:

1. Didn't K return the lock of Rachael's hair to Wallace when he was trying to find out who she was and, therefore, they already have the DNA, so why go after Deckard and his child, etc.?

2. If Wallace did not have Rachael's DNA, how was he able to recreate her so faithfully except for her eyes? Perhaps she was 'molded' like clay, just based on company archival video footage of her (I believe that's what we saw on the screen when they had Deckard in captivity)?