what does that mean? Updated servers that can handle more load? Being put in line to login and not just kicked out with a 1017? This could mean anything they want it to.
In the information you quoted, YoshiP talked about how they've put 1017 in place to avoid bogging down the Lobby server with people queuing to log in. The Lobby is only designed to handle so many people simultaneously, just like the World servers are. My hope is that some of the servers they've purchased are going to be dedicated to increasing it's capacity.

In this communique he also mentioned that while they are considering coding an inactivity time-out, that would be a longer-term effort than installing new servers. The new World servers are a band-aid, basically.

There's an update on the login UI that says the NA/EU World Update issue is allegedly fixed. I, myself, and MANY others, can attest to the fact that it is NOT fixed at all.
The issue that this Update was describing isn't the 1017 problem that so many of us have run into, but rather a problem wherein the actual Datacenters could not be queried for the World list in the Lobby, thus making it impossible to log in to any character on those Worlds affected. I know that I personally ran into this problem quite a bit yesterday, as when I'd attempt to load the character selection screen I'd get an error saying that either the JP World list or the NA/EU world list could not be loaded. Luckily, I have a toons on both datacenters, and it was usually only one or the other that wouldn't load.

Again, this Update in no way relates to 1017. That's a problem they've yet to fix, but that they are attempting to ameliorate somewhat with the new servers and are compensating us for with the extended free playtime.

I know it sucks not being able to log in when you wish to, but bashing the company that's providing the game isn't going to help at all. It's in their best interest to fix this as soon as they possibly can, but anyone with any sysadmin or software engineering experience will tell you that these things take time.

My best suggestion? Try logging in and doing the 1017 dance for 10-20 minutes at a time. If you can't get in, exit out and come back to it a few hours later. I've been able to consistently log in throughout the week on either the JP or NA servers (one or the other) using this method. Just please don't jump on the AFK bandwagon and log in early in the morning to just sit there. That makes you part of the problem, not the solution.