My two pence worth in the debate would be marginally against the character/continent limit change. I do think overall decline is being incorrectly blamed too much on 2 characters on continents. I am, boo hiss, a 2 character player in a small kingdom, but that suits well my non extrovert and not top % activity approach to the game (in a larger kingdom such as the very fine Luria Nova, where I was recently I would/did not feel active enough to take on lordships/roles etc).
It may be too late in the day (and fiddly) to consider, but increased mortality seems a much better approach, specifically with that mortality significantly amplified for all 2nd character players via battles and assassins (even just plain old age, ideally with a week or twos pre-warning?). Add to that, second character players could accumulate honour and prestige much slower so that change is real and more constant.
With increased mortality but 1 character a continent I think you encourage people to see that as a natural breaking point from that continent or even the game. I think you need the stubbornness of players who feel invested in the realms as much as it has some draw backs.
Where I think the real concern comes is that in our efforts to retain more characters for the realm we are in, we seem to lose more to apathy and not wanting to step up to activity (sorry but I can’t commit as much time as the position deserves, is a more common parting message than; I am going because I never get a chance to try what I want is my own experience). You could go increasingly extreme with the mortality and honour penalties until you get the levels of regeneration needed. All with whatever limits on lordships/offices thought appropriate per family too.