I'm the site author and creator of TownSquare. The only moment it got a bit abused it was during the first HN spike. But before and after that, everything was friendly.
I think there might be some merit to a basic filter, perhaps some sort of timeout for obvious slurs. I see a few right now.
Love this idea and your creation of it. Unfortunately do think the parent's concerns are valid - at this moment on your site at least one person has set their name to something offensive so it shows up perpetually (under the street light). Anonymity+connectivity persists in bringing out the worst of our impulses, I guess...
Do you think names are really necessary? Or could they take some other form than text, perhaps unicode chars chosen from a selection of abstract shapes? The wonderful https://www.tunera.xyz/fonts/teranoptia/ comes to mind.