Replacing Brake Pedal

Should I remove the rear master cylinder from the foot peg holder to replace the brake pedal?

You should not have to remove the rear master cylinder from its rearset mount to change out the pedal. There should be a some sort of removable pivot pin retained by a small cotter pin usually on the back, towards the wheel that connects the pedal and the master cylinder piston shaft tip that you can take off to replace the brake pedal.

I'd replace the retaining cotter pin with a new one when you install the new pedal on the bike just to make sure it will be safe, as the cotter pin might have been weakened from bending its tip from removing it

I've un-mounted the rear set per the FSM  but it didn't mention anything about the M/C. I can twist the rear set enough to have access to the items that need to be removed but I'm concerned that could damage the brake hose.  

Is it really called the rear set even though the front foot peg attaches to it?