Cathal, either it has been too late in the night or you mixed up the editor screen when multitasking, but IMO your answer does meet the question.
Unfortunately, the first 3 words of your answer are correct, there is no option to prevent a user from changing his password, which would be very useful e.g. for Demo Accounts. I suggest to log this into the feature request list in ROadmap and into the public issue tracker at support.dotnetnuke.com.
You can, however, use "user settings" in Admin :: Users to populate Displayname automatically, e.g. with FirstName + " " + Lastname.