I'm not sure that I understand correctly what you are describing. Do you want to store the Entity Name in addition to the Entity ID in Ownership?
Since you can simply use the relationship to access the entity name in Entities for any given record in Ownership, why do you need to do this? What problem does that solve for you?
The first question's answer is; the intention was yes but I understand it is not necessary.
The reasoning is that I would like the drop down list to maintain the Entity Name after selection. When I specify fields for the value list it pulls up the second value which is the name but it reverts to showing the Entity ID upon selection.
Which is a minor reason behind the simple name look up demo. It could be used in this situation.
But the wrinkle that has to be dealt with is that the text field does not automatically update if the name in the related table is changed. In the demo file, a script trigger, OnRecordLoad updates the text in the field from the related table automatically as you move from record to record. In other cases, an OnObjectSave trigger on the field in the related table could perform a script that finds all related records and updates the text field to keep them in synch.