51253 refers to how you would go about mapping the fields on a manual file import. When you use automation to populate a link field you need to hand it the information it expects to see. In the example in that KB we see you have to use the Name field of the Org Unit record you want linked.
As far as your questions:
1: I would recommend you do not change the Display field inside the Special Purpose fields on the Details of the Business Object. This has potential to cause problems with other automation and may cause
2: This might depend greatly on the method you are using to import from Peoplesoft. One way I think would work regardless of import method would be to import the numerical ID into it's own field and then use automation after the import completes to ensure the link is established and accurate. https://community.ivanti.com/docs/DOC-52778 might give you an idea of how to build a search and workflow that could link up anyone whose data does not match up correctly.