The hard disk can not easily be fully hidden, that would require some scary hacking.
Users can individually hide it for themselves, like you did in Finder Preferences. You can also remove it from the window sidebar. The hard disk is a long-standing piece of Mac user interface, as it represents all the stuff that can be found on the computer.
If you think the Finder with all its options is too complicated for some of your users, you can set up 'managed' accounts with 'simple Finder' in System Preferences > Accounts.
As for modification, what do mean? File name, or icon perhaps?