I am an owner of a Boardwalk S1 purchased in 2003. I converted it into a Three Speed with a handlebar mounted shifter at the time of purchase. I used a Sturmey Archer AW rear hub (one of the last ones actually made in England). Then I added another brake for the rear rim-a simple single pivot Teckro hand brake with a silver lever. The Dahon issued brake lever and the Teckro one does not match, but I think it adds a little charm to the bike.
Yes you can do the modification to this model of bike. I have done it with sucess (and extra cash) at my local bike shop. If I would do it again, I would use a duel pivot brake, but that's it. And you should consider some sort of brake since you will be removing it when you replace the original hub. Either add a hand brake like I did or opt for a coaster style rear hub. That is offered as an option in the hub you are considering. As for the method of changing hubs, it is called
Cold Pressing and this method works fine for steel frame bikes. The bike also has a horizontal rear dropouts so you do not need a chain tensioner.
For more information, see Sheldon Brown's web page on this topic.