From the supplier graphs, I'd say that you should run the motor at 1400 - 1500 rpm to maximize fuel economy (the engine can recover from load spikes easily because it's torque gain is very high there. But it won't be 700 h.p. because the rpm is below the h.p. line.
Yes, at 1800 rpm the dyno is rated at 2094 hp. However i suggest you talk to the dyno people and others to check, 800 hp is too big to take risks with. Where are you dumping the generated power?
It an electric motor coupled to the dyno. All the dyno in this case would do is allow the motor to run at its rated load capacity, in this example 700 hp.
The dyno is water brake system. The water is introduced to increase the load on the motor.
OK, like I said check with the dyno people, designing dyno rigs is full of traps. Is this motor electric or diesel? gearbox or not? What is the purpose of the test?
The absorption curve is just the maximum the dyno is rated to be able to absorb. As long as you are under the curve you should have no problem. At 1800 RPM the dyno is rated for almost 3 times your 700 HP. The only potential problem I could see is if you need to do some testing at very low speeds. Electric motors can produce essentially maximum torque at zero RPM and you won't be able to hold that back with a water brake.
I once was running a 700 hp diesel on a 1000 hp DC dyno set to hold speed at 2200 RPM. But the 1000 HP dyno rating was at a higher speed, I think 3000 RPM. Anyway, I was increasing the fueling and the engine started to run away with the dyno. Just had to dial it back a bit.