May I know if it is possible to create workflow in the 1st list that control items in the 2nd List?
This can be done with help of an event receiver along with (or instead of) a workflow. You can refer to my article here http://www.dotnetcurry.com/ShowArticle.aspx?ID=649
Use the workflow to handle task/approval routing. Use event receiver to move data.
In the above article I have used the event receiver to move custom content types, you could use it with modifications to deal with lists.