I would NOT recommend cycling on 69. I never see cyclists on it for one thing, and for another, they are working on extending the 400 northward. It actually extends beyond Nobel now, and I have no idea how you would stay connected with 69. It's becomming a piece of road here, and another stretch there.
Sudbury itself would not be a problem. Bicycles are not allowed on the bypass, but you can go into town and take regional road 55 west to link up with the highway west of town.
However, all that is moot if you take the suggestion to go via Manitoulin. I've ridden across the island a couple of times and it's a great ride.