Team size: In a game that spans 4 months, you might need 6 participating players to guarantee that 3-4 are active in discussions at any given time. You need probably 8 or more to guarantee your team has 6 participating players.
Why? False advertising? I think a lot of new players sign up intrigued by the idea of a "succession" game, (get a save, play it some, pass it on)... and then get discouraged because most teams are not playing these like a "succession" game. Most of us are playing game-by-committee games, with the person doing the actual moves is rotated out after each turnset. And if it takes 4 weeks to decide where to move the scout... the difference between expectations and reality will just be too large for some.
As for mixing up the teams, I think a lot of players who want to improve their game would like opportunities to learn from more different styles. These people should be able to sign up as "
free agents".
The core players who work well and are comfortable together should just sign up for the team they work best with.
OMG... I think I've just basically described the present team sign-up structure (minus the draft)!! Instead the free agents are assigned by Admin, which is quite OK... as long as Admin recognizes that someone who puts their preferred team as "no preference" should
not end up on the same team they played for last time. That GOTM staff is doing a fine job, aren't they?
As for game difficulty level... I don't think it matters. I think what most people are saying is that whether using game difficulty level or map design, the present
level of challenge of the games is sufficent to both attract new players and keep the old. There are plenty of ways to increase the level of challenge, and increasing the game difficulty level is just one of them. For example, without the fallout and diplo modifiers in SGOTM12, it would have been quite easy for every team to win the game even on Immortal level.
My only caution is that the "modification" that create challenge not be of the nature that would punish good decisions from a standard Civ4 BtS standpoint. Requires extensive testing. And from players... if conditions that are set in the beginning of the game need to be modified in light of discoveries that occur during the game, we need to be understanding of the Admins who do a great job keeping this a friendly competition as fair and as fun as possible.
If we want a game fairly soon, upping the level to immortal and accepting minor distortions to other aspects of the game is the way to go, IMO. Too long wait will cause some of the present active players to lose interest, maybe.
I think the present system where unassociated players are distributed among the teams is a pretty good system. The only "problem" is that if there are so many new players that another team has to be formed, and by default it gets a bunch of people who don't know each other and probably are not as experienced. 
