I understand why they shortened Lionheart's name, it wouldn't have fit in the 6 character allowance, and "Lynhrt" would just look BAAAAAAD. As for what was a reference to what..............

FF2 - Lionheart was a character
FF8 - Squall's last name was Leonhart (which would be pretty much the same thing in Japanese)
Kingdom Hearts - Squall felt ashamed of himself and changed his name to Leon
FF2 (FFO remake) - Lionheart's name was truncated to Leon

Just so you know, Leon is a cognate of Lion, the two have the same meaning. The name "Leonard" comes from "Leonardo" which means "leonine" AFAIK. Then again, in reflection, it could be a Germanic thing, since "Leonhart" means "Lionheart" if I recall correctly, and "Leonardo" sounds like it could be a cognate of "Leonhart".