If your capital is named after a person you'd think you would know it. If it is named after something else, it is a bit more understandable, cause you dont stop and think "hmm, who was that". Though imo I would make sense to atleast wonder about it. (All regardless of what you are taught at your school)
Edit: I just realized I'm answering to a two year old post. :P
... Hebreos - Santiago - 1 Pedro - 2 Pedro - 1 Juan ...
... Hebrews - James - 1 Peter - 2 Peter - 1 John ...
I don't know why James gets pre-emptive sainthood in Spanish but in the Bible James = Santiago.
The 'T' in Tiago and the 'D' in Diego are remnants from the 'Saint' epithet: in Old Castilian it was "Sant Iaco".
The name originally comes from Jacob. Some interesting extra details: