It's a combination of two existing characters, the rei as in meirei/命令 (order, command) and wa as in heiwa/平和 (peace, harmony). No new characters need to be reserved.
Huh, according to Jim Breen's dictionary (http://nihongo.monash.edu/cgi-bin/wwwjdic) 'good, fortunate' is '礼' (rei). '令' (rei) is listed as 'command, decree'. The official character that is being used is '令'.
Is there some rule or convention that explains why 令 means 'good, fortunate' here? Is it due to the usage in the 7th century poetry that is referenced in the article?
Even though there's an explanation, I've seen a bunch of negative reaction to the name from Japanese people online because of the association with "command", also linking it to the current prime minister and his relatively militaristic politics.
If we have to trace back even further, it can date back to the ancient Chinese classic, the Classic of Poetry, where it is being used as good/respectful:
[1] https://en.wikipedia.org/wiki/Man%27y%C5%8Dsh%C5%AB