Luckily there is the excellent Karabiner-Elements if one wants to repurpose an existing key to be the # key, maybe the generally unused §/± key...

I wonder what percentage of Mac users ever need that key

https://karabiner-elements.pqrs.org

Does that work for Linux running in a VM?

Probably, it remaps it at a fairly low level. I guess it is possible the virtualization of the keyboard might be at a lower level though.

Only way to know for sure it to try it (I don't have it installed, I did use it on a previous MacBook to map some keys when my Z and X keys started failing).