Can I put server.conf file within an application, and use deployment server to push it to forwarders?
yes you can, its being used many times, for example, deploy the license master configuration for non clustered indexers
server.conf in an app
[license] master_uri = https://10.2.1.3:8089
which configurations in server.conf are you thinking of deploying to the forwarders?
Due to some unknown reason, splunk is accepting etc/system parameters only, not the parameters which I put in app-context.
[splunk@ip-10-0-1-11 etc]$ more /opt/splunkforwarder/etc/apps/itoa-monitoring-data/default/server.conf
[splunk@ip-10-0-1-11 etc]$ /opt/splunkforwarder/bin/splunk cmd btool server list --debug | grep serverName
Warning: overriding $SPLUNK_HOME setting in environment ("/opt/splunk") with "/opt/splunkforwarder". If this is not correct, edit /opt/splunkforwarder/etc/splunk-launch.conf
/opt/splunkforwarder/etc/system/local/server.conf serverName = 100.100.100.100
take a look at splunk file precedence order:
.../etc/system/local takes precedence over .../etc/apps/app/local
hope it clears it