Can the 2nd MCU on the UNO R3 be used for keyboard emulation?
Yes, it is possible. using LUFA, you can burn new firmware to the Serial converter. The only problem is that you need to re-burn the USB-Serial converter to upload another program.

Info: http://www.fourwalledcubicle.com/LUFA.php

Specific page: http://mitchtech.net/arduino-usb-hid-keyboard/