First, changing this setting only means that you will have the option to use any log in ID desired. Emails as well as anything else you choose to use will be acceptable. As a result, existing users will still use their emails as their login, unless an admin changes their log in ID's. You will not be asked to change anything for existing users.
If you want to change existing user's ID's then, yes, you will need to have the permissions to modify the user profiles.
Well, this question has significant negative effects depending on if you are using an Adobe Hosted Service or you are using an on-premise version.
I would HIGHLY and STRONGLY suggest that you not change this if you are usign Adobe Hosted because Adobe has multiple customers on each server. It is a multi-tenant service. Consequently, if you choose to use some other login ID you may run into a security issue if that same ID matches what another customer is using! I've personally had to fix this issue using API's after a ciustomer made this ill-advised decision. If you do proceed, you need to make sure you use some company name or agency name identifier. Using just numbers would be highly unsecure. Anyone can guess numbers. Using email addresses seems to be the best to keep accounts seperate.
If you are on-premise then there is no issue. If you are using a partner like ConenctSolutions, then you are fine because they are single-tenant.