I would think it won't matter. Once you are in the game it doesn't care which server you are on. The servers were just a menu to select - the game was identical on all the servers. From what I recall the servers didn't mention which one it was while you were playing just at the start menu.
(1) A menu that's stored on the client, so you need a client patching mechanism (and some way to lock out people with the wrong version, since you can't depend on the server to do it if you can't modify it!) in place in order to change the names. You also need to completely understand the binary format the client uses for its translations. There are a handful of people in the community who know enough to be able to read it, and probably 2 or 3 who could modify it without breaking the file.
Alternatively, if you got an ex-Paragon dev on staff you have a small chance of getting one who could do it, but most wouldn't have a clue how to binary patch the game as that's not how they interacted with it. There's 3 programmers (and one designer who liked to play with the engine) I can think of who
might remember enough to be able to reverse engineer it. None of them are extremely big names, and all but 1 left the studio quite some time before the shutdown.
(2) The server does care about the name, because the global services need it. The chat server needs it as the shard name shows up in the global friends list. Things that store per-character data like auctions and AE missions also need it to distinguish between characters with the same database ID number on different shards.