WD MyBookWorld II (white light) NAS with Twonky - not really up to the job... What alternatives?

I don’t understand why you’re having those issues.

Using *any* NAS, you can disable the Password prompt by telling it to log in automatically.   You’ll never see the prompt again unless you change UID/PW.

A faster NAS isn’t going to solve your issues.   If your photos are multi-megabytes in size, it’s got a LOT of data to move to the Live before it can display thumbs.   We’re talking 30-40 megabytes.   If all of your photos have EXIF thumbnails, the process is notably faster because only the EXIF headers are needed (depending on how you’re accessing them.)