I am not suggesting a specific course of action to you; if you're happy with the approach you're using, I don't think I have a better one for you. Instead, I a

I am not suggesting a specific course of action to you; if you're happy with the approach you're using, I don't think I have a better one for you. Instead, I am offering corrections as you requested. It is possible to manipulate the hosts file and low-level DNS configuration on Android with root. It is possible to use tcpdump on Android with root. I expect it's reasonably possible to run servers on Android with root, but there seems to be less interest in that (a long-running server is surely bad for the battery life of a typical Android device, for example).