Alright, so there's a bit to tackle:
mutawarrior: Truth be told, I did not do much hacking in this title. For the first release, I provided ryanbgstl with the graphics and he put 'em in. I also read over his script and gave him a doc with some proofreading and typos/changes, but I have no idea if anything I gave him was considered or not. Beyond that, this naming screen is the first time I really touched the code.
That said, I've done an extensive amount of manipulation of Link's Awakening, which was said to use Kaeru no Tame Ni as a base. If the two are anything alike, I'd check the save file for a flag. In LA, there's a byte to signify when Marin's following you, so it may be the same with this game. Get a save file before and after getting something following you and do a compare. I'd be surprised if it wasn't in there somewhere. For the flags, I'd be just as clueless you as you going into it. If it were for LA, I could give you a pretty full map of the save file, but that doesn't really do you much good, probably.
As for Sakurai, he didn't have anything to do with the game, I don't believe. Also, I don't think he should get merit based on including the assist trophy in Smash -- I doubt the team really delved much into localizing names for overseas releases. However, his account is the only official Nintendo employee's take on the title to my knowledge, so that gets a little merit in my eyes.
Tomato said: "At that level it's just personal preference I feel, both are trying to link to the original title in a different way". So it's really a coin toss to him as well.
For the wine thing, I'm all for my translations being closer to the real thing than getting the process close to what Nintendo would've released. Let's be honest, here: the audience of this hack are more mature gamers who want to check out old titles for the consoles of yesteryear. We don't need to worry about corrupting kids much I don't think.

As for the é, it looked too flat when adding the extra pixel, and deleting the other side or shifting it over makes it meld into the 'e' too much. The letter sections could be remade to make the caps in the first column, lower case in the second, and numbers in the third, but the Z will always be alone due to being #26 in 5-long divisions. Changing the screen so it doesn't make groups of 5 would require some in-depth ASM hacking for controlling the cursor, and I'm way too busy developing my own game to want to get waist-high in that. Besides, I'm pretty inexperienced when it comes to ASM hacking -- I don't really know what tools are handy. Last time I did Z80 reverse engineering, I essentially had to go through tons and tons of subroutines to even figure out what was going on and where functions even started. I'm sure there're tools that make it easier, but I'm oblivious to them. (Though suggestions would rock if anyone has any!)
I'll give it some time to maybe get a few more people's ideas on the subject before submitting the revised version. I'll also go ahead and get rid of the extra letters. There'll be a line of spaces instead, but it's probably better than an incomplete set of accented letters.