There's nothing related to hardware, not even 50% of resources are used from our machine, your example of test-server and server20 is clearly showing that, as both test server and server20 are on same machine despite no delays.
Secondly, this is not the highest number we have online, we had over 900 (chars) as record on first 30rr edition, but we also had 2 sub-servers back then.
Thirdly the "move-loops" are not related to lag but to move-speed-protection, that will probly be disabled on next update as it is giving false detections.
There are too many people on same sub-server than it should optimally be on our files, but not enough to split in 2 sub-servers, not even saying that entire gameplay is thought for 1 sub-server, being 2 will hurt a lot starting from limit of accounts up to too many spots, goldens and etc.
We'll hold a maintenance most probably tomorrow, we'll see how it will be after and what possibilities we have.