Unless I'm mistaken, in order to change characters, one has to logout. PITA. Minor PITA, but PITA none the less.

Keep all the same mechanics as logging out (timer), but instead of killing the session and spitting the player to the login screen, just send them back to the character selection screen.

+1, with amazingly low priority. Unless there's a EULA related reason to keep it as is, in which case leave it alone.

+(machine precision)

Agreed, unless of course it's a one liner.

Yes, but also keep the Log Off button too :)
+1