I was told on a support call with K2 to use /runtime/runtime so that's what I've been using.
1. I believe you are seeing both the 'servername' and the 'farmname' because this is an out-of-the-box feature; the k2 server will broadcast and K2 workspace will try to surface any K2 Servers in your domain. As you have reconfigured the K2 server to using a farmname, perhaps using the KB below to control these broadcast and display only the appropriate farm name/K2 server per K2 Workspace:
http://help.k2.com/kb001221
2. Regarding which URL to use when running the Registration wizard, I believe any URL that resolves to something K2 should work; as this uses the K2 Autodicovery service; you can see which URL should work by hitting this service in your environment:
http://{ServerName/HostHeader}/AutoDiscover/AutoDiscover
Documentation regarding this service is below:
https://www.k2.com/onlinehelp/k2blackpearl/devref/4.6.7/webframe.html#autodiscover%20service.html