Does the wall sit build muscle?

It builds quad endurance and some size at the position it is held in, but a squat or leg press through full range builds more.

How long should I hold it?

Most people work in the 30 to 60 second range. Past two minutes it is training endurance more than strength.

You slide down a wall until your thighs are parallel and hold. No equipment, no skill, and a burn in the quads that arrives quickly.

Primary: Quadriceps. Secondary: Glutes, Calves, Core.

Stand with your back flat against a wall and walk the feet out about two foot lengths.
Slide down until your knees and hips are both bent to about ninety degrees.
Keep the whole back in contact with the wall and the weight in the heels.
Hold for time, breathing normally, then walk the feet back in to stand.

Sitting higher than parallel as the hold gets hard. Set the position once and end the set when it slips rather than creeping up the wall.
Holding the breath. Breathe steadily throughout; an isometric does not need a held breath.

Sets of 30 to 60 seconds, often as a finisher or in a home session. Add a plate on the thighs when a minute is easy.