If you just blow away the primary partition, then you should be able to restore it over USB from the "safe mode" (aka "Special Options") partition.  "Restore to factory defaults" restores the system settings files only - obviously it can't restore an entire firmware partition since there isn't another copy on the device to restore from.

There's no way to tell whether your modified Linux will "operate differently" without knowing what changes you intend to make.

There really aren't too many situations that absolutely require reflashing the kernel - almost everything can be done with loadable kernel modules from USB.