Yes, you do modify the reservation every day...ideally at midnight Eastern Time. The problem is crossing Saturday night stays because the website doesn't tell you how many rooms of which type have been reserved by Home Week reservations...and Lagoon tower owners usually make home week reservations because the point costs are so low compared to the value of the room you can reserve.
We own every other year weeks at Lagoon and our 2020 reservations had to be cancelled due do COVID. I walked to get a week in the summer of 2021...and quite frankly I kept having to jump around with different room types and sometimes had no active reservation at all. That said, I think September is slightly lower demand.
As for which tower, if it is just the two of you and you are happy in a studio I would suggest Kalia - the studios there are larger and you are guaranteed a higher floor. If you want a 1BR then there are advantages to either Lagoon or Kalia. But both have low point costs and are therefore more difficult to book. You may have to choose the Grand Waikikian or Grand Islander. Not that there is anything wrong with them - some people prefer them because they are newer - but they do cost more points.