Yes, this requires that you replace dgdata.zip. Even if you can search for internet games with a modified data file, there is no way to determine whether or not other players are using the same modified file.
With the FA lobby mods, if you tried to join the lobby for a game that didn't have the same lobby mods you had, a whole variety of things could happen, ranging from immediate problems to absolutely no indication of problems until the game launched, at which point it would instantly desync. Lobby mods in FA were used only for skirmish play for this reason.
Second, the shop auto-fill thing I wrote has little or no implication for a lobby re-write, which would be a fairly significant task. I've looked at the Demigod selection parts of the lobby before, and it seemed pretty significant and confusing. I'm not entirely sure that it's possible to actually change available demigod slots. It should be possible to jury-rig some kind of extra demigod selection by hijacking an existing slot, but it would be messy and a lot of work.
Lastly, I don't see the draw for limiting demigod selection other than for 'uniques' type games. And as I just said in another recent post, GPG themselves tried to pull this off (there are code remnants that hint at such a system), and didn't have the time/resources/engine capability to do it.
Since nobody can effectively make additional demigod models due to the Granny issues, you're limited to shallow copies of existing demigods, using the same meshes and animations. Sure you can tweak a few things, add different abilities, but you can already do that with existing demigods, and nobody has put forth the effort for that kind of single-demigod 'total conversion' anyway.
I'm not trying to crush your dreams, but holy crap would doing any of this be a lot of work. Even if I had endless time and motivation, I'd be hard pressed to pull it off. And given that the game's problems are already too much of everything (so many useless items, demigods, skills), rather than not enough, I definitely don't have the motivation to start on anything this big.