I think children pick up on tones and vibes, and these influence their thoughts and emotions. The name James will give a different tone and vibe to the name Michael.
If we know it or not, these subtly different vibes do influence thoughts, which lead to influencing emotion, and at the end of the day, character.
The words and tones we use around children is critical, because it shapes them. Names are words, they have the same affect.