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Two things...

The plugin has a line class AvatarFirstLetter extends Gdn_Plugin which needs to be changed to class AvatarFirstLetterPlugin extends Gdn_Plugin. You also need to find the line $rgb = AvatarFirstLetter::stringToColor($name); and change it to $rgb = AvatarFirstLetterPlugin::stringToColor($name); Afterwards it might be needed to delete /cache/addon.php

Then there is a CSS problem. When you are already editing that plugin, you can also edit the css in the design subfolder. Add something like the below to see some effect

.DataList .PhotoWrap img,
.MessageList .PhotoWrap img {
width:6em !important;
}

This is not very clever or elegant or whatever: it was just something that worked when I hacked it into the browser. I guess there is a better style to apply than that....

There is a piece of code in Vanilla which validates the user name against a pattern. You can set that pattern in the config so that it allows blanks. This is the code used:

           $defaultPattern = (unicodeRegexSupport()) ? '\p{N}\p{L}\p{M}\p{Pc}' : '\w';

           $validateUsernameRegex = sprintf(
               "[%s]%s",
               c("Garden.User.ValidationRegex", $defaultPattern),
               c("Garden.User.ValidationLength", "{3,20}")
           );

Therefore I would advise to add the following line to your /conf/config.php:

$Configuration['Garden']['User']['ValidationRegex'] = '\p{N}\p{L}\p{M}\p{Pc} ';

Never change existing files!

Vanilla can be modified mostly completely without changing files, just by adding files. To answer your question: you can use view overrides. You would need to create a theme and then create a file in a folder that is the same name like the view that you want to override. I'm not 100% sure which view you are talking about. Otherwise I could be more specific.

But what you are talking about sounds like a task for CSS. If I inspect e.g. https://open.vanillaforums.com/categories I see the following html

<li id="Category_27" class="Item Alt Category-blog Item-Category-blog Depth2 Depth-2 Archived Unread Rank-Vanilla Offline">

The body id of the page is #vanilla_categories_index. If you go down to where the line is where you would like to change something, you might come up with something like this:

#vanilla_categories_index .CategoryList .Unread .ItemContent.Category .Title::before {
 content: "💡";
 margin-right:1em;
}

With that you could use e.g. the Pockets plugin to insert your individual CSS

Looking for Settings > Roles & Permissions > Flagging

And then Moderation > Flagged Content / Spam Queue