That's great! You can change the name of a button/hat in the .buttonMap files to your liking, but I guess you figured that out already.I was able to follow the steps in your first option. I liked the idea of nice icons (question about that below). The only thing I had to do was change the PIDs for my particular sticks, just like you said. Everything after that also worked perfectly and now, I have everything mapped the way I want/need.
They should show up in some parts of the HUD as well, yes. For example, in the "Press X for disembark options" right in the middle of your canopy window, or in the help text on the bottom of the FSS, the galaxy map, the system map, and the camera suite.I didn't get a chance to play much after changing things up but the only icons I saw were in the options menu when you are mapping/binding buttons. Is that what you meant? Or do you get the nice icons in the ships HUD while you are playing?
By the way, I used the icons that are meant to be for the Logitech/Saitek X52 Pro, so not every icon fits the look of the VKB Gladiator perfectly. You can read more about the available icons in the file ...\Elite Dangerous\Products\elite-dangerous-odyssey-64\ControlSchemes\DeviceButtonMaps\Readme.txt