Learn Portuguese (Portugal): Como esta cidade mudou!

In Portuguese, the simple past (pretérito perfeito) is used for actions that are completed, even if they affect the present. If we used the Portuguese present perfect (tem mudado), it would mean the city has been changing continuously or repeatedly recently. Because we are looking at the final result of the change, the simple past is the natural choice.

Does como mean how as an exclamation here?

Yes! While you probably know como as a question word or a comparison word meaning like or as, it is also used to start exclamations to express surprise or emphasis.

Could I use que instead of como to express this?

No, because mudou is a verb. When you are emphasizing a verb to show how much an action happened, you must use como. You use que when emphasizing a noun or an adjective, such as que cidade linda! meaning what a beautiful city!

Could I change the word order to Como mudou esta cidade!?

Yes, that order is also perfectly natural. In exclamatory sentences starting with como, you can place the verb before the subject, but keeping the standard subject-verb order (esta cidade mudou) is just as common and correct.