I changed the AWS key for SSH access to an EC2 instance by creating a new key from the console and then added the public key value to authorized_key file, which worked as expected.
However, in the AWS console it is still showing the old key name as key for that instance. Will it be problem in long run in any case? How can I change the old key name to the newly created key name?
You cannot change the initial key name of an Amazon EC2 instance as shown in the AWS Management Console.
However, as you’ve already explored, it is not a problem to add another key for every day usage and won’t be a problem in the long run either; in fact, you could also delete the former key pair via the AWS Management Console with zero impact on your already created instances, please see Eric Hammond’s answer to consequences of deleted key pair on ec2 instance for more details on the subject matter.