They had a capo back in the early 1800s for guitar - only they called it a "choker".   I don't know if they ever used 'em on banjos, though.

It was a wooden block with a fiddle peg set in it's top, which put tension on a string wound around the back of the neck. From the illustration in one of Justin Holland's guitar tutors it seems to have had a leather or felt pad where it pressed onto the strings.
Making up a reproduction would not be all that difficult, and I intend to make one one of these days.

As to the muted sound where the strings are pressed onto the board, I think that as your callouses develop that this will be less of an issue.

I've never tried the nylon feaux-gut strings, so don't know how they compare with the real McCoys. I get my guts from Boston Catlines:

BOSTON CATLINES
Olav Chris Henricksen
34 Newbury Street
Somerville, MA 02144 USA
(617) 776-8688.

I don't know if he is still in business though.
He made the strings for the Boston Symphony Orchestra, and he's good!
Before ordering, know the "vibrating length" of your strings and what pitch you intend to tune them to.

If you hang them up and run a fingerfull of varnish onto them, then let them dry well before insalling (leave the head end raw so you can soften it - I put it in my mouth for a minute or so - before winding on the peg) and they will last a lot longer.
Don't leave them strung up to pitch for very long; let them down slack before storing the instrument, like a longbow.

Usually only the tenor strings were gut; the bass strings were copper wound silk, and Olav can't tell the difference in sound between the very expensive silks and the modern nylon, so he uses the nylon aucoustic folk basses in the gut sets he sells. In the case of the banjo, that's only the 4th string.

Back in the day, I've used strings from old badminton rackets and fishing leader to string up a banjo - and it sounded pretty decent.