This is a quite old post and I am surprised that it shows up in the current active discussions. But here are my answers in case it really is a currently active discussion.
The 2516 should make a fine terminal server. Yes the async ports would use the Cisco console roll over cables. The 2516 has an Ethernet interface and if you have the appropriate connector you should be able to connect it in your home lab. With an appropriate IP address, mask, and default route it should be accessible remotely on your network.
HTH
Rick
HTH
Rick