Can anyone tell me whether it would be possible to migrate a really old instance (version 5.0 ServicePack 2) to ODSEE 6.3.1 using dsmig? Also, if it is at all possible, both instances are on separate servers. Would that prove to be an issue?
the Directory Server 6.3 migration utility works only starting from version DS 5.1 and later, so unfortunately the plain answer is: 'no, you cannot use the dsmig tool'. However you could think to perform a manual migration verifying all the required changes to the schema, indexes, ACIs, etc... as described in the official product documentation:
[Chapter 3 - Migrating Directory Server Manually]
For what it concerns the second question, the answer is no, it shouldn't be an issue.