In the circumstances 40ppm Nitrate is not too bad and you can take care of it quite easily.
I would imagine the issue with the hair algae is the light more than the water quality. You might have to work out how to stop more light getting in. I've used black out fabric to cover a tank before when I had it in the corner of two patio doors and that helped a lot.
If you do choose to replace the substrate, I would remove it over a number of weeks as without it your ph will go from 7 to 6 quite quickly which could shock your fish. But over all I believe your fish should benefit from having the lower ph and the fry you raise from the Severums should grow out better and healthier. If you have Geophagus I would make sure that you swap to a very fine sand as a substrate as their 'Eartheater' behaviour can cause damage if you have sharp, large or abbrasive sand or gravel. Something like play sand is perfect for them.
How are the fry doing? Are they still hatching?
I also just want to delve a bit deeper into your stocking if that is ok. We have quite similar sized tanks - mine is 135 gallons and the stock you mentioned earlier causes me some worries. When you say other gold Severums how many do you have? Then what kind of Geophagus do you have and how many do you have? I worry about the Bala Shark, the problem with these is that they just shouldnt be sold, they are a shoaling fish in the wild and swim massive migratory patterns and should get to about 16 inches. Ideally if we keep them in tanks you want something huge above 300 gallons which is still not perfect but it does prevent them banging into the glass, in tanks like ours you often see them with snub noses where they have crashed into the glass or decor as they can be quite flighty. The Ghost Knife again is a potentially massive fish getting to 20 inches. The pleco is this a common? If so you are probably ok but be aware having a big plec will have an impact on the bioload of the tank when they get up past 10 inches or so. The Kissing Gourami and Blue Acara are both still big fish but you are realistic in this tank, depending on the tank mates. Then when you say the other small fish, do you know how many of these and what kinds you have?
It may be that for long term success with the tank, as in 5 years + it may be best to rehome some of these fish, especially considering most of them are able to live more than 10 years. It would also help your odds of raising the fry and preventing too much fighting as the fish grow.
Hope that helps
Wills