As for using the clay for pots,,We have a mix of red and gray clay under our sandy soil. I was curious about doing the same thing. I got a good clump from the edge of our stock pond and it does work well for pots. Its kind of a long process to make it into a slurry and strain it then wait till most of the water evaporates. There may be a faster way but I do not know it !! I just let mine air dry since its just an experiment but you can paint and fire them too with the correct paints !! I spray painted mine !! Mine gets brick hard and is not easily broken but I just made a small coaster not a large pot !!
I'm going to ask around and see if anyone has tried using the clay here. It has a lot of very small to large rocks in it so I know it would have to be screened. It is an interesting idea.
Oh yes, it dissolves. I didn`t take all the little rocks out,,just the larger ones. But if you put it in a container with a small amount of water and squish it through your fingers,,you can feel most of them. You can use an old piece of metal window screen to filter it, Now if you want to make a nice pot you will need to strain it. You can find directions online for using your own clay to make pots. I didn`t go to the trouble since I was not sure this clay would hold together. I just made a rough shape and let it air dry.