How to use a shit nugget

No, there's no option to skip an attack.

What you can do is either use a Power Potion and then a spell (items are a 'free' action, and there's really no point in hoarding consumables), or use the 'Switch Buddy' command to swap in a different team member with a ranged attack, such as Kenny.

Alternately, just eat the Riposte. Honestly, they usually don't do that much damage. Butters can handle it.

There's no limit, other than your own sanity in trying to manage your inventory. In fact, there's even an Achievement for completing the game without selling anything, ever.