No they are starting cities. Servers are different -- and it was only until recently that you were able to choose your server; they used to just chuck you onto a random one unless someone had a world pass for you on their server.

Most servers have around 3,000~4,000 people on them, so they have around 12~ or so different servers. Though I haven't really read anything FFXI for awhile so those numbers could be off.

And Square-Enix changed it so your Content ID would be held inactive for up to 1 year, and even then it could still be there after that time period is up. I think what you may be referring to is the PlayOnline ID that you won't be able to activate after 3 months -- but you never ever need to cancel that because it's free.