Type = Apples, Oranges, Limes

Location = South America, USA, Germany

From a different form I want to choose from a number of entries that are made of the above selections, and choose them in a drop down. 

The issue is that the Display fields can only be made up of non lookup fields, which is a real pain, as the selections above identify the type and location, which is perfect for picking it in the dropdown.

What I end up having to do is adding a script at the on edit and on success which generates another field called Name that comprises of Type + " " + Location, that way I can have this as a drop down.

This all works very well until I decide I want the format of the Name changed, perhaps I want to see it as Location +" " + Type, or perhaps another field. As this is in an on Add, and on Edit action, to update, I would need to go thru each and every record, opening, and saving, to update all the fields. 

So my first question,

1. Is there any way around having a lookup field in a lookup field

or 

2. Can I automatically update records that have on Add actions?

I think this question was trying to ask this as well: