Storage Shared or local

I am planning to setup a 3 node ES cluster with all 3 nodes have their local disk storage for data and NFS storage for ES install in following fashion of storage in given filesystem names

Node[1,2,3] : /NFS/install

Node1 : /local1/data
Node2 : /local2/data
Node3 : /local3/data

Shard Setup : 2 primary and 1 replica for each index.

The above local filesystem of each node are not shared with other 2 nodes i.e. Node2 can't read data on /local1/data(Node1) or /local3/data(Node3).

/NFS/install is a common NFS filesystem mounted on all above 3 nodes which contain ES installation package with following directories
bin config data lib LICENSE.txt logs modules NOTICE.txt plugins README.textile script

How to set the path.data at cluster level for above data & install storage filesystem naming?

Should I do some renaming of local filesystem names to simplify?

No, you should at least give each node its own config directory, and then you can set per-node options like the data path on a node-by-node basis. Sharing a config directory between nodes will be very confusing.

Ok. So keeping a independent copy of config(elasticsearch.yml) for each node will not cause an issue in case this file gets deleted or modified in a running cluster?
Does ES maintains a meta information of these node specific yml files within database?

Elasticsearch reads its config at startup, so will not notice any modifications or deletions until the next time it starts. Except the keystore, which Elasticsearch can reload while it is running.

No.