to the best of my knowledge there is no path flag, however....
you can name the directory anything you want and have the server launch just fine so long as you\'re using the -server flag and the Starmade.jar jarfile, as it\'s already located inside the directory with all the other game files.
Unfortunately, automated updating, unless you write your own script for fetching/installing* the latest build, depends on StarMade-Starter.jar being one level above the starmade directory and it being named \'StarMade\'. I managed to nest several updates before fixing this with my own setup.
IMO, you have several ways of going about automating things. You could nest the StarMade directory for each server inside of a directory named for the server
IE: ~/server1/StarMade and ~/server2/StarMade
then you could run the updater individually, which is okay if you\'re running different versions on the servers.
The other way is to have the servers in whatever folder you want and keep a blank server with the defaul pathing that\'s used exclusively for downloading updates and then create a script that copies the relevent files/folders from the update server to your other server directories, which saves on time and bandwidth.
Of course, there\'s always downloading the latest build manually from files.star-made.org/build and use ftp or what-have-you to manually transfer the files into your server folders.
Hope this helps!
*this actually sounds like something interesting I may play around with.