I'm certain that closing an island isn't the way to go. Merging could be fun, but only with two similarly sized islands. Providing advantages for having knights would go a long way to keep realm's from expanding until every character is a lord. Making regions harder to hold, or more dependent upon the Lord's presence, might be another solution. Blighting some regions with monsters, like I read above, sounds like one of the better options, if this is the route chosen. Though, I'd change the name to peasant rebels, or something rather than monster hordes.
I don't think raising character limit will help much at all. All I can see it doing, is adding more drones. More drones isn't necessarily a problem, but I doubt many people think playing a drone is all that fun. I'd wager that there are some people that have the ability to play more characters, but don't for some reason. When I was donating, and had 5 slots, I didn't typically keep 5 characters.
Another problem that I think exists, is that certain positions have almost no turnover. On FEI, I held the duchy of Ortedail for pretty close to three years, and Lantzas, a richer non-city, for longer. There are players who've held positions for considerably longer than that. It would seem reasonable to think that newer players are discouraged by lack of turnover.
BM would really benefit from some reliable, and reasonable, way of creating a power struggle. I don't know how best to do this. Assassinations are unreliable, extremely expensive, require ridiculously long training, and largely ineffective in most cases. Other than for infiltrators, I can't remember the last time I saw someone lose titles due to imprisonment. Wounds from battle typically don't last long enough to remove titles, and I don't really think it's a good idea to make wounds last longer. Mortality has been requested, and rejected more times than I can count, so I won't even go there.
I think playing a drone is rather fun if we're at war. I for one would welcome having more characters to play as, and don't really see the argument for the really low limit of 2 nobles starting out for a new player.
