For the FTP part, locking down users to their home directory can be done through your FTP server, provided your using one that supports such a feature. I use VSFTP and I can configure it so that users can't get out of their home directory. You'll probably have to check into what FTP server Fedora uses by default, and if it isn't VSFTP, I would suggest changing.
Also, I use Putty and tend to log in each user through there own individual session, im not sure how to "manage" different logins from one session. Ie login as root and then switch to user1 and back again to root and so on..
First off, please tell me that you don't allow root login via SSH. Not a good idea. Second, you can probably do what you want one of two ways. First would be to use the su
command to change to the user you want to be. When you're done, you just exit and you're back to the user you logged in as. The other way to handle this would be with the screen
command. By using screen you can set up as many virtual terminals as you like from a single SSH session. The nice bit is that if you disconnect from a screen session, it continues running and you can reconnect to it the next time you log in. Sort of like VNC for the command line.