Any idea why we can't have both? I want to be able to shout things at peolpe while fighting, and maintain a motto as well...

They're both stored in the same place. In this case, a napkin Hajamin keeps under his coffee-cup. If he had to get a second napkin, he wouldn't be able to keep up with all the requests for mottos because he'd keep looking at the wrong napkin.

While we're at it, why are they limited to 55 characters? And why aren't people who set quotations as their motto (His motto is: Narsrim says, "OMFGWTFBBQ NERF!") aren't being punished for it?

From what I understand, quotes are fine for mottos (though they would make more sense for a separate category of maybe "favorite quote"). Some time ago in Achaea, everyone had quotes in thier warcries because mottos were bugged and I think it was Clementius that made everyone transfer their quotes to their mottos.

So let's get him another mug, to go with a second napkin. Or we can have our cake and eat it too.