define hostname and mail server settings

I'm hoping there are some really simple questions to these answers, but I'm wondering how to setup hostname and mail server domain name settings.

I'm using the Pantheon Mercury AMIs to create instances. The server is up and running fine.

When a new user registers, the mail is sent from ec2-79-125-64-6.eu-west-1.compute.amazonaws.com instead of dev.mysite.com. All the links in the email point to the long AWS name instead of the short real name.

A) Do I need to specify a hostname somewhere in the ubuntu server configuration.

B) Also, I would like to setup a mail domain such as dev.mysite.com. I know that I need to create an MX record for dev.mysite.com and point it to the ec2-79-125-64-6.eu-west-1.compute.amazonaws.com or elastic IP address if I attach an elastic IP address of the server, but how do I configure the server to receive mail at dev.mysite.com?

I'm not asking this in the Pantheon group, because I'm not sure it really has anything to do with the Pantheon/Mercury images specifically, and probably more of an Ubuntu setup question with possible specific configuration criteria for AWS hosting.

C) Is there still problems with routing mail from servers at AWS. I hear that there were several problems with all the RBL's (spamhaus, spamcop, message labs, etc.) blocking the entire IP segment that Amazon owns for AWS, but I'm also hearing that this is now, not too much of a problem and the issues has somewhat been eased.

Any feedback on how others are configuring the mail routing would be fantastic.

I'm moving several sites from a traditional cPanel/WHM manager - dedicated server setup which all have separate accounts, separate drupal installations, and separate mail domains configured on the same server to an AWS instance with Project Mercury in a shared Drupal install setup. I'm wondering whether I should also configure mail accounts for these sites or host the mail offsite.

Is anyone else doing something similar? If so, how do you configure the mail, and allow access for customers to SFTP their files to their specific /var/www directory (or are you allowing that).

Any feedback, no matter how small will be gladly appreciated.

Kind Regards.