I think it would be better to have more than only 16 chunks loaded at a time, that way, players can do more. Also they will be able to be farther away from things like farms, and still have them be working.
Wait why isn't zQuinn or Itz_Ace or STAMPYxcxx or whatever he is called banned yet? I've heard loads of ppl saying he has joined their island and just stole everything. Most recently Lithnen
Yeah, he keeps restarting tho lol I think he puts other ppl's stuff in his echest and makes new islands
Its a smart idea but, obviously yes the lag would be an issue. Try and make an island with many active people, more chunks will load and your island will grow quicker. Just be sure to only invite people you can trust.