1.) It depends on "how" they are taking damage. If it's by projectile, make sure it cannot pass through map block attributes. If it's by an aoe spell, I'd recommend changing this to a projectile aoe to account for map blocking attributes.
2.) To hide the NPC names, you can edit the colors.json file in your server directory, and under "npcs" there is a list of all types of npcs. In each name, you will have the color layout in the format ( I believe? ) of Alpha, Red, Blue, Green.
Change the Alpha from 255 to 0, then save the file and start your server.