The Eastern Mediterranean, notably Cyprus, is a climate change hotspot facing severe heatwaves. Accurate numerical weather prediction of these extremes requires precise land–atmosphere modeling and initial and boundary conditions. This study assesses replacing the default USGS Land-Use and Land-Cover (LULC) dataset with the 10 m ESA WorldCover 2021 dataset in the Weather Research and Forecasting (WRF) model to simulate the 15–29 July 2023 Cyprus heatwave. The updated LULC increased urban representation six-fold. Statistical validations showed significant improvements in 2 m temperature, relative humidity, and 10 m wind speed predictions across 85% of observational sites. Dynamically, it restored urban thermal memory, effectively capturing the daytime Urban Cool Island effect and nocturnal heat release. Furthermore, radiosonde validations showed that the update corrected nocturnal Planetary Boundary Layer Height (PBLH) underestimations and dampened exaggerated daytime convective mixing. However, crucial limitations remain. High-frequency diagnostics indicated the model still suffers from damped thermal inertia, missing the abrupt temperature spikes and rapid nocturnal cooling typical of semi-arid microclimates. Additionally, the updated configuration failed to capture severe atmospheric stagnation during peak heatwave conditions, highlighting that deep-rooted kinetic errors persist within default boundary layer parameterizations despite static surface improvements.