Hey, Ferrara,
I'm glad to see you are thinking about the problem and taking it seriously, but my suggestion is:
If it's a lousy song, don't sing it. If it's a good song then sing it as it was written, and if it has words like "darky" that you wouldn't use in everyday conversation, talk about that with the audience. It's a good chance to make a point and start people thinking.
In Foster's case, I don't think he was insensitive. Just the opposite. He used the word to make the song more poignant. In his songs, it is the voice of a slave using the word to describe himself and his friends and family, and it has all of the sadness and bitterness and irony of the man who accepts for his self image the worst of that to which his oppressors have subjected him.
To me, it's the use of the word "darky" that mkes the song so powerful and bitter. Without that word it dissolves into something trivial and not worth singing. If you can't sing it as it was written, just play the pretty melody.
The word, "nigger" in "Ol' Man River" has the same power for me. Of course, it takes a black man to sing it. Frank Sinatra, who did a very nice version, couldn't have used the word. Paul Robeson could, and did. In later years he kept changing the words in an evolution of the lyric that made a political statement (eventually, "I must keep fightin' until I'm dyin'" instead of, "I'm tired of livin' an feared of dyin'"). That was ok. More than ok, it was powerful and inspirational, but that doesn't mean the song itself should change. He didn't do it to improve the song. He was singing his own song.