1. for me the teams from other division are rivals too, and i know my league rivals better because more teams stay in my division, i think must people can remember more then 12 persons ;)
2. but in the first season not,because you had to smaller the divisions, which is pretty chaotic
As for the playoff, that's easy. The top 2 teams get a bye through the 1st round.
don't you get a a new "5th place"
4. maybe i agree a bit, but the actual system is not that bad ;) Because in pretty unbalanced division, the top division get only one demotion, the other one 3.