1. Regarding time limit – please try settings new “PHP time limit” option in “WooCommerce > Settings > Product XML Feeds > General > Advanced Options” to some larger number, e.g. 600 seconds.
2. Regarding excluding “Sold Out” products – please go to “WooCommerce > Settings > Product XML Feeds > XML Feed #X” and there at the bottom of the page there is new “Stock status” option. You should set it to “In stock”.
Hope that helps. Please let me know if something is not working as expected.