The fast that servers are on different boxes doesn't cause lags, it reduces it lol, less things on the same box = less process = more performance. The problem here is your location.
Server damage disabled isn't for lag purposes only, it was only meant to disable dmg calculation so people are clueless about dmg they do to the emp or players during a woe. Some servers only shows 1 dmg for every hit
My test server is the most balanced server ever! But it is my personal toy which I keep playing with and add stuff and test them for fun and fix them. ;D