On Ben's explanation:
I think it makes enough sense, given who Luke is and Tatooine's political situation. In short, the only visible manifestation of the Empire on Tatooine is in the presence of the Stormtroopers. This presence increases a great deal (I think...) during ANH, due to obvious (to us) reasons, but nevertheless, this is all most people on Tatooine are ever going to see of the Empire. The comparison of Vader to Elvis or Al Gore or whomever else is a flawed one, in that you're comparing figures made popular in a free culture (and in the case of Elvis, as an entertainer). The Empire is decidedly not a free culture and information is probably stringently controlled. Furthermore, Vader is an enforcer, not an entertainer. Do
you know the name of the director of the secret service off the top of your head? The FBI? The CIA? I sure don't. Furthermore, even assuming Vader's name is "well known," how "well known" is he going to be on Tatooine? To a moisture farmer? How much does it matter to a moisture farmer who runs the galaxy or who the officials are? Life on Tatooine seems to be pretty much unchanged between the time of the prequels and the end of ROTJ (save for the death of Jabba the Hutt). Outside events, especially events "such a long way from here," will have little impact on the lives of Tatooine's inhabitants. Given the preceeding, I think Ben's dummy-explanation of Vader is fine.
On Luke's non-reaction:
The idea that Luke was in shock or some other notion seems slightly unreasonable. He asked about the Force almost
instantly after Ben finished his explanation. Luke asked how his father died. Ben told him. It was pretty straight-forward. The one thing Luke didn't understand from Ben's explanation was 'the Force,' of which he had never before heard. As such, that's what he asked about. IIRC, Luke does react when Ben says, "He betrayed and murdered your father."
Then Ben goes on to explain that the Jedi were all but extinct and that Vader was seduced by the dark side. It's a new line of thought. I think he moves on quickly in order to avoid giving Luke time to dwell on it and feel any kind of dark emotions. In essence, he mentions the Force in order to give Luke a distraction; to take his mind
off of the death of his father.
Is that sufficiently satiating for you?