I'm not using Steam, but rather follow the download and donation route. That version can be installed in however many copies I want (I rename the previous game folder when installing the latest version, but don't actually use any but the latest).
The things in the character folder are save game info, not game info, and so shouldn't be expected to be part of verification/installation: if you were using some kind of roaming save that would come into play (I don't know if Steam has something like that for UrW).
Wiping the game and then reinstalling it would get rid of any game data you've messed up, but if you've hacked saves it's up to you to restore backups (if you don't make backups you should: UrW can crash and corrupt saves, although the latest release should have takes steps to reduce the corruption risk a little).