Yes, and yes
Yes, it will be a problem if you run a 125mm fork on a frame that the mfr has already told you can handle 80-100mm. People have done it, but re-read snaky69's post over and over until you get the idea. As for the Vanilla's ability to be reduced to 100mm, the answer is yes. I recently purchased a used one, and the seller was willing to reduce it to 100mm if I wanted him to. I left it at 125mm, but seem to recall that adding/removing spacers inside the stanchion is how it's done.
Ask in the Shocks forum. My guess is they might be able to give you instructions on how to reduce the travel.
Good luck with the project.
Bob